According to recent data released by Bangladesh Bank this week, the amount of default bank loans in the country climbed to a record Tk1.25 lakh crore.
It’s no big secret that our banking sector has been dealing with a crisis for a long while now, but it is now facing unprecedented problems arising from the culture of bad loans that is all but ingrained within the system itself.
The data also reveals how banks have disbursed loans worth Tk13,98,592 crore till June 2022, of which Tk1,25,258 crore has been declared as being defaulted, which means that 8.96% of loans have been made classified -- the highest ever in the country.
This is the absolute last thing the country needed right in the middle of dealing with multiple global crises.
Corruption, nepotism, favouritism, and political have continued to wreak havoc when it comes to borrowing and have resulted in an industry that is on the brink of the collapse. And unless these problem elements are nipped in the bud, our banking sector will continue to hemorrhage and put undue stress on the economy.
A good start, to that end, would be to bring serial loan defaulters to book and be made examples of. Our state owned banks have long been breeding grounds for such malpractice - these institutions need to be investigated without delay.
The administration needs to understand that a functioning and healthy banking sector is instrumental for the sustainable growth of any economy, and even more so for one that is just at the starting point of its upward trajectory. With the number of default loans and their amounts increasing with each passing month, this poses a more direct threat to our economy than anything else at this juncture.
