The defaulted loan figure is set to double as the Bangladesh Bank is set to tighten the classification rules for all types of loans by March next year to meet the International Monetary Fund’s loan conditions.
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.
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.
Default loans in the banking system surpassed Tk 200,000 crore for the first time, underlining the fragile condition of the sector that fell prey to rampant scams and irregularities under the tenure of the Awami League government over the past 16 years.
Govt should overhaul ailing sectors, ensure accountability
Recover bad loans, punish those who exploited the sector
Those who were involved in stealing funds from the country must be held accountable.
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 actual size of bad loans is more than double the officially recognised figure, according to a recent report of the International Monetary Fund -- a damning evidence of the fragile state of Bangladesh’s banking sector.
