The amount of bad loans has been spiralling in Bangladesh owing to rampant politically-motivated lending and inadequate credit risk management, according to a World Bank report.
Four state-run banks in Bangladesh are finding it difficult to recoup loans from their top 20 defaulters, a failure that has worsened their financial health and squeezed their capacity further to lend.
Default loans in the banking sector of Bangladesh hit an all-time high of Tk 182,295 crore, but no reform programme to reduce it has been announced in the budget for the upcoming fiscal year.
Bad loans rose by Tk 36,367 crore in just three months
The Bangladesh Bank yesterday unveiled its roadmap for reining in the runaway defaulted loans to a reasonable level and bringing in good governance to the banking sector, which is progressively becoming an Achilles heel of the economy.
Bangladesh’s banking sector has the second-highest ratio of non-performing loans (NPL) among the countries in South Asia as lenders continue to face multiple challenges emanating from scams, a lack of corporate governance and borrowers’ growing reluctance to make instalments regularly.
Four state-run commercial banks registered 29 per cent year-on-year spike in bad loans in 2022 as the central bank’s relaxed classification rules introduced in the wake of the Covid-19 outbreak ended and their inefficient lending persisted.
Misgovernance, corruption, nepotism and subsequent bad debts keep plaguing our banking landscape.
The Bangladesh Bank’s policy that allows defaulters longer repayment tenures and easy terms and access to fresh funds has appeared to have failed to make major inroad in bringing down bad debts as rescheduled loans are even turning sour.
The amount of bad loans has been spiralling in Bangladesh owing to rampant politically-motivated lending and inadequate credit risk management, according to a World Bank report.
Four state-run banks in Bangladesh are finding it difficult to recoup loans from their top 20 defaulters, a failure that has worsened their financial health and squeezed their capacity further to lend.
Default loans in the banking sector of Bangladesh hit an all-time high of Tk 182,295 crore, but no reform programme to reduce it has been announced in the budget for the upcoming fiscal year.
Bad loans rose by Tk 36,367 crore in just three months
The Bangladesh Bank yesterday unveiled its roadmap for reining in the runaway defaulted loans to a reasonable level and bringing in good governance to the banking sector, which is progressively becoming an Achilles heel of the economy.
Bangladesh’s banking sector has the second-highest ratio of non-performing loans (NPL) among the countries in South Asia as lenders continue to face multiple challenges emanating from scams, a lack of corporate governance and borrowers’ growing reluctance to make instalments regularly.
Four state-run commercial banks registered 29 per cent year-on-year spike in bad loans in 2022 as the central bank’s relaxed classification rules introduced in the wake of the Covid-19 outbreak ended and their inefficient lending persisted.
Misgovernance, corruption, nepotism and subsequent bad debts keep plaguing our banking landscape.
The Bangladesh Bank’s policy that allows defaulters longer repayment tenures and easy terms and access to fresh funds has appeared to have failed to make major inroad in bringing down bad debts as rescheduled loans are even turning sour.
There are two major economic problems that have been plaguing Bangladesh for a long time: Rising non-performing loans (NPLs), and money getting laundered out of the country.