The default loans in the banking sector increased to 9.89% of the total outstanding loans of Tk5,53,075 crore in the first quarter of the current fiscal year.
The amount of default loans stood at Tk54,708 crore in July-September quarter of 2015-16 compared to Tk52,518 crore in April-June quarter when it was 9.67% of the total outstanding loans, according to Bangladesh Bank figures.
The International Monetary Fund recently advised Bangladesh to bring down the amount of default loans to a tolerable level.
During a recent visit, an IMF delegation said the amount of default loans would have declined had the authorities ensured transparency and accountability in the banking system.
Earlier under the IMF pressure, Bangladesh Bank had forced the scheduled banks to bring down the default loan rate as it came down to single digit in December last year.
Though the default loan rate came down to 9.69% in October-December quarter, it did not sustain long and the rate jumped to double digit again at 10.47% in January-March quarter.
The banks had been going through a hard time over the past two years as it had failed to do business amid political unrest that shot the default loan up, said a senior executive of a private bank.
Moreover, banks cut their lending rate faster in last one year to compete with foreign loan inflow which will ultimately affect the profit of the banks, he said.
The growth of default loan rate for private banks and foreign banks rose to 6.09% and 8.79% respectively in September compared to 5.67% and 8.25% in June, according to the central bank data.
The default loan rate of state-owned banks dropped slightly to 21.82% in the first quarter of the current fiscal year compared to 21.89% in last quarter of fiscal year 2014-15.