The total volume of non-performing loans (NPLs) has increased by more than three times in the last 10 years since 2012, according to a report of the Centre for Policy Dialogue (CPD) revealed today.

The NPLs increased to Tk 1,343.96 billion in the first quarter of the fiscal year 2023 from Tk 427.25 billion in the fourth quarter of FY2012, as per the report.

The CPD unveiled the report titled "Managing the Economic Crisis: CPD's policy recommendation" at an event held in Dhaka.  

"However, actual NPL will be much higher if loans in special mention accounts, loans with court injunctions, and rescheduled loans are included," it said.

The CPD mentioned that appointments of bank directors based on political connections, loans sanctioned on political grounds, rescheduling of loans despite the poor record of repayment, and writing off loans to reduce the tax burden and clean balance sheets of banks are among the reasons behind the high volume of the NPLs in the country.

Besides, the weak internal control and compliance risk management of banks, lack of independence of the Bangladesh Bank, dual regulation by the Financial Institutions Division and the central bank, and flexibilities given to defaulters by the central bank are also responsible for the high volume of the NPLs, it said.