Non-performing loans in six state-run banks soared by Tk 6,805 crore in the three months ending in March, allegedly due to the central bank鈥檚 lenient approach towards defaulters.
According to Bangladesh Bank data, default loans in these six state-owned banks surged to Tk 85,870 crore in March, up from Tk 79,065 crore in December 2023.聽
The NPL in these six state-owned banks increased by Tk 25,228 crore from Tk 60,642 crore in March 2023.
The six banks are Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, BDBL, and Basic Bank.
Bankers said that default loans in December were slightly subdued due to balance sheet clearing pressures at the end of the year and election-centric loan rescheduling.
However, banks were unable to continue rescheduling loans or recovering bad loans during the January鈥揗arch period, resulting in a jump in non-performing loans.
At crisis-hit Janata Bank, default loans skyrocketed to a record Tk 30,495 crore in March, representing 31 per cent of its total loan disbursement. This was a significant increase from Tk 25,009 crore in December 2023 and a double from Tk 15,005 crore in March 2023.
Agrani Bank鈥檚 NPL declined from Tk 21,476 crore in December to Tk 20,864 crore in March, accounting for 28 per cent of its total disbursements. The NPL at Agrani Bank was Tk 14,806 crore in March 2023.
Sonali Bank鈥檚 default loans increased to Tk 14,988 crore in March from Tk 13,340 crore in December 2023. Rupali Bank鈥檚 default loans rose to Tk 10,357 crore in March from Tk 10,043 crore in December 2023.
The NPL amounts at Sonali and Rupali represent 14.84 per cent and 21 per cent of their total loan disbursements, respectively.
At scam-hit Basic Bank, default loans increased to Tk 8,292 crore in March from Tk 8,204 crore in December.
However, at BDBL, default loans declined to Tk 873 crore in March from Tk 993 crore in December. The NPL at Basic and BDBL represent 63 per cent and 33.97 per cent of their total loan disbursements, respectively.
BB officials noted that the six state-run banks held more than 50 per cent of聽 the total default loans in the banking sector.
The total default loan in the banking sector was Tk 1,45,633 crore at the end of December 2023, up from Tk 1,20,656 crore in December 2022 and Tk 1,03,273 crore in December 2021.
The data on total default loans until March was unavailable.
Bankers say many defaulted loans were sanctioned under political considerations.
Despite promises from the government and the central bank to reduce default loans, bankers said the situation was deteriorating.
Experts have expressed grave concern over the surge in default loans, warning of devastating impacts on both the banking sector and the economy.
The borrowers, they argue, took most of these default loans willfully, backed by their political, financial, and lobbying power.
The Bangladesh Bank has been criticised for its failure to rein in default loans and for not addressing the massive irregularities in the sector.
Of the total default loans, 87 per cent turned into bad loans, which the central bank feared were irrecoverable.