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Dhaka Tribune

Industrial loans rise by 31.52% in FY23 despite low LC openings

Industrial term-loans advanced to Tk95,172 crore in FY23 against Tk72,360 crore in FY22

Update : 25 Jan 2024, 05:19 PM

Disbursement of industrial loans has surged by 31.52% in FY23.

According to Bangladesh Bank data, industrial term-loans advanced to Tk95,172 crore in FY23 against Tk72,360 crore in FY22.

However, opening letters of credit (LC) for importing capital machinery in July-May plunged by 55% and LC settlement dropped by nearly 30%, data also showed.

LC opening for importing industrial raw materials also dropped by 30.15% while settlement fell by 10.82% in the period.

In FY23, the disbursement of working capital loans reached Tk467,172 crore, reflecting a 14.17% increase compared with that in the previous financial year.

Banks and non-bank financial institutions together disbursed total Tk562,344 crore in FY23, 16.78% higher than  that in the previous year.

The total recovery of industrial loans in FY23 was Tk106,393 crore, which increased by 64% to Tk64,862 crore in the previous financial year.

The central bank data revealed a concerning trend with the amount of overdue loans in the industrial sector reaching Tk59,590 crore by the end of June 2023, up from Tk50,928 crore in June 2022.

The overdue loan amount indicates a debt that has passed its due date, meaning it should have been repaid by a certain time, but has not been paid yet.

The highest amount of overdue loans is in private banks, standing at Tk28,930 crore at the end of the past financial year.

Private banks held the highest amount of overdue loans, totalling Tk28,930 crore, followed by public banks Tk21,650 crore, foreign banks Tk340 crore and specialized banks Tk500 crore.

Non-bank financial institutions also accounted for Tk8,170 crore in overdue loans.

The outstanding of industrial loans at the end of June 2023 stood at Tk395,320 crore, which was Tk320,410 crore at the end of June 2022.

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