Defaulted loans at six private commercial banks nearly tripled in one year till September 2024, according to central bank data, which bankers term “alarming”.
The state itself had deepened inequality as it “sponsored dis-equalising factors”, exempting corporations from taxes and helping banks with liquidity for years on end only to benefit the elite, said Prof Rehman Sobhan, chairman of the Centre for Policy Dialogue, yesterday.
Payment failure for three months or 90 days after the due date will now lead to classification of loans regardless of type, according to new rules announced by the central bank yesterday, aligning with international best practices prescribed by the International Monetary Fund (IMF).
When most non-bank financial institutions (NBFIs) in Bangladesh are in hot water with high ratios of non-performing loan (NPL), a handful have been successfully able to keep the rate low.
Awami League-affiliated businesses had already put the country’s banking sector in trouble with huge bad debts, but the loans disbursed through irregularities to these companies turned sour even at a more alarming pace after the party’s ouster.
Twelve non-bank financial institutions (NBFIs) out of a total 35 are holding nearly 73.5 percent of the sector’s bad loans, according to Bangladesh Bank data, reflecting a precarious situation at those entities.
Sixteen non-bank financial institutions (NBFIs) faced a combined provision shortfall of Tk 1,954 crore till June this year, reflecting that their financial health had worsened.
Non-bank financial institutions (NBFIs) in the past fiscal year saw their defaulted loans reach a record 33.15 percent of all disbursed loans, according to the central bank, indicating a fragile situation in the sector thanks to widespread loan irregularities and scams.
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.
Defaulted loans at six private commercial banks nearly tripled in one year till September 2024, according to central bank data, which bankers term “alarming”.
The state itself had deepened inequality as it “sponsored dis-equalising factors”, exempting corporations from taxes and helping banks with liquidity for years on end only to benefit the elite, said Prof Rehman Sobhan, chairman of the Centre for Policy Dialogue, yesterday.
Payment failure for three months or 90 days after the due date will now lead to classification of loans regardless of type, according to new rules announced by the central bank yesterday, aligning with international best practices prescribed by the International Monetary Fund (IMF).
When most non-bank financial institutions (NBFIs) in Bangladesh are in hot water with high ratios of non-performing loan (NPL), a handful have been successfully able to keep the rate low.
Awami League-affiliated businesses had already put the country’s banking sector in trouble with huge bad debts, but the loans disbursed through irregularities to these companies turned sour even at a more alarming pace after the party’s ouster.
Twelve non-bank financial institutions (NBFIs) out of a total 35 are holding nearly 73.5 percent of the sector’s bad loans, according to Bangladesh Bank data, reflecting a precarious situation at those entities.
Sixteen non-bank financial institutions (NBFIs) faced a combined provision shortfall of Tk 1,954 crore till June this year, reflecting that their financial health had worsened.
Non-bank financial institutions (NBFIs) in the past fiscal year saw their defaulted loans reach a record 33.15 percent of all disbursed loans, according to the central bank, indicating a fragile situation in the sector thanks to widespread loan irregularities and scams.
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.
