The default rate on large loans in the country's banking sector has increased at an alarming rate. According to the latest report of Bangladesh Bank, the default rate on accounts with loans exceeding Tk1 crore has increased to 31.20% in a year.
A year ago, this rate was 19.90%.
According to the central bank, the total amount of defaulted loans on accounts with loans exceeding Tk1 crore stood at about Tk554,486 crore at the end of the December quarter of 2025.
Those concerned say that the picture of the actual defaulted loans is becoming clear since the introduction of new policies for loan classification according to international standards.
A senior official of Bangladesh Bank said that changes have been made to the loan classification rules in line with international practice.
Earlier, if a loan was unpaid for 180 days, it was considered default. The new policy has reduced that period to 90 days.
Since the implementation of these strict standards, the amount of defaulted loans has increased significantly since last year.
However, the default loan rate has decreased slightly in the December quarter compared to the September quarter.
At the end of September, this rate was 36.30%.
The concerned said that this slight decrease has come about because Bangladesh Bank has given some relaxation in various policy support and loan write-off.
According to the new rules, a loan can be written off only after it is classified as 'bad'; earlier, it had to wait for two consecutive years.
Central bank officials say that several large institutions have rescheduled their loans under the policy support.
As a result, a significant number have been temporarily excluded from the default list.
Otherwise, the amount of defaulted loans could have been higher by the end of December.
According to bankers, one of the reasons behind the increase in defaulted loans in the last one and a half years is the real picture of the loans that have been hidden for so long.
In the past, there was an opportunity to show non-performing loans as regular through various techniques, which has now largely stopped.
In addition, the real situation is being revealed as a result of verification of the assets of several banks by foreign audit firms.
In particular, the amount of non-performing loans has increased significantly in the combined Islamic banking system, which consists of five Islamic banks that are in the process of merging.
Industry stakeholders believe that the culture of irregularities, fraud and corruption that has been created in the banking sector over the past decade and a half is becoming clear in the current picture of non-performing loans.
A huge amount of loans of several large corporate institutions, including S Alam Group, Beximco Group, Nassa Group, Bismillah Group and Hall-Mark Group, are currently in default. In addition, the impact of the Basic Bank scandal has not yet fully subsided.
