The growth rate of default loans has come down to single digit again in the second quarter from the double digit of the previous quarter, thanks to loan rescheduling by the large business groups under the special rescheduling package offered by the central bank.
The gross default loan rate stood at 9.67% in April-June quarter of the year 2015 from 10.47% in the previous quarter.
The amount of the total default loans decreased by Tk2,141 crore to Tk 52,516 crore in June 2015 compared to Tk54,657 crore in January-March quarter.
According to Bangladesh Bank’s latest data, “The total outstanding loan stood at Tk5,43,085crore in June.”
Though the default loan amount decreased in June, it is still up by Tk2,316 crore compared to Tk50,155 crore in October-December quarter of the last year.
The banking sector has experienced of single digit default loans rate of 9.69% in October-December quarter of the last year, thanks to the measures taken by the central bank.
However, the trend could not sustain any longer as most of the clients, who rescheduled their loans by taking advantages of the relaxed policy, failed to pay their installments.
Earlier, the default loan rate came down to single digit in October-December quarter of the year 2009. Then it remained below 10% till July-September quarter of 2012.
The banking sector witnessed a rise in NPL since last quarter of 2012 and also saw abnormal growth during the year 2013.
Bangladesh Bank relaxed its reschedule policy in December 2013 to facilitate the business groups affected by political unrest.
As a result, the default loan rate came down to single digit 8.93% in last quarter year 2013, thanks to huge loan rescheduling under the relaxed policy.
The trend did not sustain longer as the clients, who rescheduled their loans taking advantages, failed to pay their installments further.
The banks were asked to bring down the rate of default loans to single digit at any cost by the end of December 2014.
The default loan rate came down to single digit again in June this year as some large groups, who applied for loan restructuring, have been shown as unclassified in June closing statement of the banks, said a senior executive of Bangladesh Bank.
Around fifteen large business groups that have defaulted repayment of around Tk12,500crore loans have applied for restructuring their debts under a Bangladesh Bank policy issued in January to aid top defaulters on grounds of prolonged political crisis.The deadline of applying loan restructuring under the policy expired on June 30 this year.
The central bank has approved Janata Bank’s proposal for rescheduling loans against four companies amounting to Tk3,700 crore under the large-loan restructuring policy.
The four companies are-Beximco Group with Tk1,849crore, Jamuna Group Tk598 crore, Thermax Group Tk666 crore while Ratanpur Group Tk691 crore.
On January 27 this year, Bangladesh Bank had allowed defaulters of large loans with above Tk500 crore to restructure their loans considering the ground that they were badly affected by the then political turmoil across the country.