Non-performing loans (NPLs) hit a record Tk345,764 crore at the end of December last year, a total of 20.20% of total disbursed loans in the country.
Bangladesh Bank Governor Ahsan H Mansur revealed the figures at a press conference on Wednesday in the capital.
The amount of non-performing loans (NPLs) in the banking sector has started rising as information about defaulted loans hidden during the previous government's tenure has started to come to light, the Bangladesh Bank (BB) governor said.
At the end of December 2024, non-performing loans (NPLs) in Bangladesh surged to Tk3,45,764.86 crore, accounting for 20.2% of the total outstanding loans in the banking sector, the governor revealed.
He said: “The more we look, the more NPLs we keep finding.To deal with this situation, Bangladesh Bank wants to restructure weak banks.”
Seeking anonymity a BB official told the Dhaka Tribune said: “During the Awami League government that was ousted in the student movement, a large amount of money was withdrawn from banks anonymously. Due to proper compliance with regulations, it is now starting to be identified as default.”
The governor also said that: “Banks that need to be merged will be merged or restructured with new investors.”
“The Banking Company Act is being reviewed and legal reforms are underway. After these processes, the banking sector will be restructured,” Mansur added.
Regarding another issue of rising NPLs, the governor said: “Previously, loans were classified as overdue after 270 days, but the timeframe has now been reduced to 180 days. Furthermore, starting from April 2025, loans will be classified as non-performing within just 90 days. Due to this new policy, NPLs are expected to rise even further in the coming months.”
However, the amount of NPLs was Tk1,45,633 crore at the end of 2023.
As of December 2024, at least 42% of total loans in state-owned banks were classified as non-performing and 15% of total loans in private banks were non-performing, the governor disclosed.
Data shows that, NPLs stood at Tk2,84,977.31 crore at the end of September last year, which was 16.93% of total outstanding loans at the time.
This means default loans increased by Tk61,000 crore in just three months.