According to sources at the meeting, the central bank expressed concern over soaring default loans, which is not desirable in any way
Bangladesh Bank (BB) has instructed banks on Wednesday to reduce the amount of default loans in the banking sector to 10%, which currently stands at Tk99,370 crore, or 11.45% of disbursed loans as of September this year.
The central bank governor Fazle Kabir sternly told this to bankers at a meeting in the Bangladesh Bank office.
BB Deputy Governors SM Moniruzzaman and Ahmed Jamal, executive directors of BB’s concerned departments, and managing directors/CEOs of scheduled banks were also present in the meeting.
According to sources at the meeting, the central bank expressed concern over soaring default loans, which is not desirable in any way.
They instructed all banks to immediately reduce default loans to 10% and also minimize their provision shortfall.
The central bank will provide all necessary assistance to banks to realize non-performing loans from willful defaulters, the meeting was told.
After the meeting, Syed Mahbubur Rahman, president of the Association of Bankers, Bangladesh Limited (ABB) and also managing director and CEO of Dhaka Bank Ltd told reporters that banks have been asked to give special emphasis in reducing default loans as soon as possible.
According to BB data, the non-performing loans (NPLs) of banks rose by a staggering Tk10,030 crore from July to September this year, increasing the amount of default loans in the banking sector to Tk99,370 crore.
The amount of bad loans amounted to 11.45% of total disbursed loans in September, the data read. In June, the total bad loans in the banking system was Tk89,340 crore, or 10.41% of total disbursed loans.