Default loans surpass Tk 1 lakh crore again

Default loans in the Bangladesh's banking sector has gone past Tk 1 lakh crore despite relaxed loan classification policy taken by the central bank.

Up until September this year, non-performing loans (NPLs) stood at Tk 101,150 crore, up 14 per cent from nine months earlier and 7.1 per cent year-on-year, data from the Bangladesh Bank showed.

The NPLs also increased 2 per cent in September compared to June when the volume stood at Tk 99,205 crore.

The central bank has been following a relaxed loan classification policy since last year, but it has failed to contain the upward trend of the delinquent loans.

The NPLs declined massively in the final quarter of 2019 on the back of another regulatory forbearance of the central bank.

For instance, defaulted loans stood at Tk 116,288 crore as of September 2019, but the figure nosedived to Tk 94,331 crore at the end of the year.

The central bank had allowed banks to reschedule their defaulted loans in 2019 by accepting a down payment of only 2 per cent of the outstanding amount instead of the existing 20-50 per cent.

The relaxed rescheduling policy had helped banks to bring down the classified loans for the time being.