Staff Reporter:

Non-performing loans (NPLs) in the country’s banking sector have crossed the Tk 6 trillion milestone for the first time, reaching Tk 606,284 crore at the end of June. This accounts for 32.78% of total disbursed loans.

Bangladesh Bank released the updated figures on Wednesday (September 2).

According to central bank data, default loans surged by Tk 17,851 crore within a three-month span. At the end of March earlier this year, NPLs stood at Tk 588,704 crore.

Commenting on the sharp rise, Bangladesh Bank spokesperson Arif Hossain Khan stated that accrued interest on existing defaulted loans was the primary factor behind the increase. He added that loan rescheduling opportunities have been offered to curb NPLs, which is expected to lower default figures in the coming months.

Comparative analysis reveals that NPLs stood at Tk 557,217 crore at the end of December. The figure then jumped by Tk 31,487 crore by the end of March. Although default loans briefly dipped during the October–December quarter, the trend reversed in subsequent quarters.

Data further shows that five banks recently merged to form ‘Sanmilito Islamic Bank’ currently hold NPL ratios exceeding 80%.

Senior bankers attribute the runaway growth of default loans to widespread irregularities, fraud, and corruption in the banking sector during the 15-year tenure of the previous Awami League government. When the Awami League-led government assumed power in January 2009, NPLs stood at Tk 22,481 crore. By June 2024, shortly before the government’s fall, NPLs had escalated to Tk 211,391 crore.

Following the fall of the Awami League administration, the subsequent interim government began revealing the true financial health of the banking sector. As numerous politically backed borrowers went into hiding, default figures escalated rapidly. In response, special loan rescheduling facilities were introduced to bring NPLs under control.