A good bank ensures quality of loans (assets) by selecting the right borrowers, sanctioning loans to various sectors in different sizes, and keeping collateral.
At the end of December 2023, Bangladesh's banking sector had NPLs worth Tk 145,600 crore, around 9 percent of total outstanding loans, central bank data showed.
Recent figures show alarming rise in defaulted loans
Default loans in the banking sector shot to a historic high at the end of June this year owing to rising non-performing loans (NPLs) at state-owned commercial banks, said Bangladesh Bank (BB) yesterday. The amount of NPLs at the state banks stood at Tk 74,450 crore, up 28.45 percent from
Leniency towards habitual defaulters led to this situation
The actual share of NPLs in total loans would have crossed 20 percent had BB not loosened the definition.
Microfinance institutions (MFIs) in Bangladesh witnessed an 85 percent year-on-year jump in non-performing loans in 2021-22 as borrowers struggled to pay back owing to the impacts of the coronavirus pandemic and the economic slowdown, official figures showed.
The banking sector’s total risky loans amounted to Tk 377,922 crore at the end of last year, in a development that makes for a sobering reading of the actual health of this vital sector of the economy.
Appellate Division’s observation on defaulted loans is right on the mark
13 have NPL below 3%, much lower than the sectoral ratio of 8%