Despite Bangladesh Bank efforts in bringing out business from default culture, the uptrend in classified loans continue for the consecutive third quarter in September.
It rose to 11.6% in July-September quarter from 10.75% in the previous quarter, according to Bangladesh Bank data.
The rate had dropped to 8.93% in December last from 12.79% in the previous quarter, thanks to huge loan rescheduling taking advantage of a relaxed policy.
The central bank measure failed to help sustain the reduced default loan and got back to the previous uptrend from March quarter, rising to 10.45%.
Finance Minister AMA Muhith recently said the country’s business has come out of default loan culture and expressed the hope it would be reduced further to 8% from existing 11%.
The amount of total default loans stood at Tk57,300 crore in September, increasing by around Tk6,000 crore from Tk51,344 crore in June, according to Bangladesh Bank data.
The four state-owned banks accounted for 36% or Tk20,800 crore of the total default loans.
Of the state-owned banks, the default loan rate of Sonali Bank rose to 37.65% in September from 36.27% in June while Janata Bank 14.81% from 13.46%.
The default loan rate of Agrani Bank and Rupali Bank reduced slightly to 21.05% and 15.13% respectively in September from 21.17% and 15.60% in June.
The rate of classified loans of private banks rose to 6.34% or Tk22,134 crore in September from 5.7% in June while it reduced for foreign commercial banks to 6.19% or Tk1,422 crore from 7.10% or Tk1,638 crore during the same period.
Loans of approximately Tk18,000 crore have been rescheduled under the relaxed policy during December 2013 to June this year, according to the central bank data.
Considering the political unrest, Bangladesh Bank relaxed its loan reschedule policy in December last year with an aim to help banks reduce their default loans. The clients received advantages of relaxed policy till June this year.
Of the total rescheduled amount, eight state-owned commercial and specialised banks accounted for Tk9,174 crore.
Only four state-owned banks, including Sonali, Janata, Agrani and Rupali, rescheduled Tk8,012 crore which was 43% of the total rescheduled amount.
According to the central bank data, Sonali rescheduled Tk756.41 crore loan while Janata Tk2,057 crore, Agrani Tk2,061 crore and Rupali Tk3,137 crore.
It was apprehended that the banking sector would face a rise of default loan in September as a series of indiscipline took place in the rescheduling process, said a senior executive of Bangladesh Bank.
Over 30% of the clients who rescheduled their loans taking advantages of the relaxed policy have already failed to pay their installments and became defaulter again, he added.
