The amount, however, has soared by Tk 19,608cr compared to the same period in 2017
Banks’ Non-Performing Loans (NPLs) have come down to Tk93,911.40 crore or 10.30% in three months until December last year, due mainly to recovery efforts and loan rescheduling ahead of the national elections.
The amount of stressed loans was decreased by Tk5,450 crore in the Oct-Dec quarter of 2018, compared to the Jul-Sep quarter of the same year. At the end of September, the amount of NPLs in the banking system were to the tune of Tk99,370 crore, according to latest Bangladesh Bank data.
However, NPLs rose by Tk19,608 crore compared to the same period in 2017.
Senior bankers at BB said the bad loans are typically reduced at the end of each year as bankers put in efforts to recover NPLs to make their balance sheets attractive.
Besides, large scale loan rescheduling took place in the final quarter of last year ahead of the national elections that helped reduced the amount, they added.
“Naturally, default loans decrease in the December quarter of every year. Now, it our main target is to cut NPLs drastically,” said M.A. Halim Chowdhury, Managing Director of Pubali bank.
Of the total NPLs, six state-owned commercial banks account for 29.96%, or Tk48,695.87 crore of their total disbursed loans. Their total outstanding loans were Tk162,520.88 crore as of December.
The default loans of Private Commercial Banks (PCBs) were Tk38,139.85 crore or 5.54% of total disbursed loans for the period. Total outstanding loans of PCBs were Tk68,8937.79 crore as of December, the BB data said.
Talking to the Dhaka Tribune, former Bangladesh Bank governor Salehuddin Ahmed said it is a good sign that non-performing loans have started declining. In the December quarter, banks try to push recovery from defaulters to make good annual reports.
“But it is to be observed how long this positive trend continues. The trend needs to be sustained,” he added.
Default loans of foreign banks stood at Tk2,288.03 crore or 6.47% of total loans, with their total outstanding loans hitting Tk35,369.81crore in December.
NPLs of two specialized banks, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank, stood at Tk4,787.64 crore or 19.46% of total outstanding loans in December. Their total outstanding loans stood at Tk24601.74 crore.
Bangladesh Bank Executive Director and spokesman, Sirajul Islam, told the Dhaka Tribune that the central bank has always had a strict position on reducing the extent of default loans.
Banks' NPLs hit nearly Tk 1 lakh crore at the end of September 2018, the largest yet in Bangladesh's 48-year-history. The amount was Tk99,370 crore, or 11.45% of disbursed loans.