• Thursday, Jul 18, 2019
  • Last Update : 12:18 pm

NPLs of 10 banks increase alarmingly in Jan-March period

  • Published at 09:43 pm June 17th, 2019
loan default
Representational photo of default loans Bigstock

According to Bangladesh Bank data, non-performing loans (NPLs) in the banking sector rose by Tk16,962 crore during the period

The non-performing loans (NPLs) of three state-owned and seven private banks have increased alarmingly compared to other banks during the first three months of 2019.

According to Bangladesh Bank (BB) data, non-performing loans (NPLs) in the banking sector rose by Tk16,962 crore during the period of January-March. NPLs of 10 banks rose by Tk11,881crore, or 70.04 % of the total.

The banks are Janata Bank, Agrani Bank, Rupali Bank, and private commercial banks- Islami Bank, National Bank, Al-Arafah Islami Bank, Mercantile Bank, One Bank, Southeast Bank, and Standard Bank.

The amount of stress loans in the banking sector stood at Tk1,10,873.54 crore at the end of March, which is the largest ever in the country's history.

During the period,  Janata Bank’s defaulted loans rose by Tk4,186 crore, Islami bank’s rose by Tk3,600 crore, National bank’s increased by Tk1,537crore; Al-Arafah Islami bank by Tk730crore; Agrani bank by Tk397crore; Southeast bank by Tk334 crore; One bank by Tk320crore; Mercantile bank’s defaulted rose by Tk314crore; Rupali bank’s rose by Tk240crore, and Standard Bank’s defaulted loans rose from Tk223crore to Tk1,017crore, according to the latest data of the central bank.

Agrani Bank Managing Director Mohammad Shams ul Islam, while speaking to Dhaka Tribune, said: "The non-performing loans (NPLs) usually increase in the first quarter of every year.

He hoped that these NPLs would decrease during the June quarter.

On June 11, the central bank cautioned the chief executive officers of Sonali, Janata, Agrani, Rupali, National, Islami, and Al Arafah Islami banks after their default loans had marked an alarming rise in the first quarter of this year.

Bangladesh Bank spokesperson, and Executive Director Md Serajul Islam said: “Bangladesh Bank governor inquired about the reasons why the defaulted loans had shot abnormally as of March this year. He asked them to bring down their defaulted loans without any delay. ”

“The CEOs of these 10 banks have assured that they would undertake attempts to reduce the amount of defaulted loans in the June quarter,” he added. 

Furthermore, the banking sector faced a combined provision shortfall of Tk11,652 crore at the end of March, exposing their aggravating financial health.

Fourteen public and private sector banks are included in the list. Of the 14 banks, four are state-owned, while the remaining ten are private commercial banks.