After a decrease of Tk 1,858 crore, default loans accounted for 25.50 per cent of total loans in June this year against 28.10 per cent six months ago.

The total classified loan amount was Tk 22,104 crore in June.

A central bank official attributed the improvement to better portfolio management and loan write-off.

In the last six months, banks wrote off about Tk 3,500 crore in bad loans -- Tk 1,300 crore by the nationalised commercial banks (NCBs) and Tk 718 crore by nine private banks.

As a result, the balance sheets of the banks were purged of the classified portfolios.

Even after all these efforts, the June figure of defaulted loans includes TK 18,526 crore in bad loans.

A central bank source said the net classified loan figure is now 19.31 per cent -- 28.46 per cent for the NCBs, 9.25 per cent for the private banks,.03 per cent for the foreign banks and 33.70 per cent for the specialised banks.

The net classified amount is calculated by deducting the provision the banks make against classified loans from the gross classified amount. Banks are supposed to provide fully for their classified loans.

The defaulted loans of the four NCBs decreased Tk 390 crore to Tk 11,789 crore, or 1.31 per cent to 32.42 per cent.

The private banks also showed some improvement. Their default portfolio decreased Tk 252 crore to Tk 5,231 crore, or 2 per cent to 14.89 per cent.

The foreign banks reduced their default loans Tk 10 crore to Tk 127 crore, or.40 per cent to 2.15 per cent.

But the noticeable improvement is seen in the specialised banks that reduced their default loans by Tk 1,205 crore to Tk 4,956 crore, or by 5 per cent to 51 per cent.