Default loans in Bangladesh's banking sector have surged significantly, reaching Tk 6,44,515 crore at the end of September this year.
This alarming figure represents 35.73 percent of the total disbursed loans.
The increase is massive compared to the end of December 2024, when the volume of non-performing loans (NPLs) stood at Tk3,35,765 crore. This indicates that default loans have ballooned by Tk 2,98,750 crore over the nine-month period, although this is mainly due to the exposure of funds siphoned off under the previous government that are only now beginning to be included under the NPL category, as well as the adoption of stricter international standards in classifying loans.
The development was confirmed by Shahriar Siddiqui, Director and Spokesperson for the Bangladesh Bank, to the media on Wednesday (November 26).
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Bangladesh Bank officials attribute the substantial increase to multiple factors:
Exposure of Unaccounted Funds: Funds reportedly siphoned off from banks under various names during the tenure of the Awami League government are now beginning to be classified as non-performing.
Adoption of International Standards: The country's adoption of international standards for classifying loan defaults is contributing to the rise in NPLs.
Failure of Rescheduled Loans: Many loans that were previously restructured or rescheduled are failing to be repaid.
Central Bank Intervention: The central bank has listed several irregular loans as defaults, further pushing up the NPL volume.
According to data from the central bank, the total outstanding disbursed loan amount stood at Tk 18,03,840 crore at the end of September this year. Of this amount, the defaulted portion, as mentioned, is Tk 6,44,515 crore, which is 35.73 percent.
Comparing year-over-year figures, default loans had reached Tk 2,84,977 crore at the end of September last year. This means that the total volume of non-performing loans has increased by a staggering Tk 3,59,718 crore over the past twelve months, for the factors mentioned above.
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