Default loans rise to Tk6.44 lakh crore in Sept, a staggering 35.73% of total loans
Total default loans increased by over Tk2.24 lakh crore in just six months from April to September
Country's banking sector experienced a sharp rise in default loans by a staggering Tk2.24 lakh crore in just six months, reaching Tk6.44 lakh crore at the end of September.
The total default loan rate surged to 35.73% at the end of September from 24% in March, according to Bangladesh Bank data released today (26 November).
The total loans in the banking sector stood at Tk18 lakh crore
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According to a central bank statement, total default loan in the banking sector was Tk4.20 crore in March.
The banking sector saw a sharp rise in default loans since December last year due to massive loan corruption during the previous regime revealed after the uprising.
Default loans increased by nearly Tk3 lakh crore in the first nine months of the current year from Tk3.45 lakh crore in December last year, central bank data shows.
Moreover, tightening the classification rule in line with international best practice, which was implemented from March this year, also contributed to a massive increase in loans, said industry insiders.
Under the new classification rule, borrowers will be marked classified from the very next day of the payment expiry date, which means the account will come under classification in three months of non-payment.
Previously, accounts were classified 9 months after the expiry of the instalment payment date.
The Bangladesh Bank reinstated its loan classification rule of 2012 by cutting the overdue time of a term loan by six months in response to the condition set by the International Monetary Fund (IMF) as part of a $4.7 billion loan package.
Bangladesh Bank data shows that provision shortfall increased to Tk3.44 lakh crore at the end of September this year.
