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Dr. Mustafa K Mujeri

  • Institute for Inclusive Finance and Development (InM) · Board of Directors Doctor of Philosophy

Institute for Inclusive Finance and Development (InM) · Board of Directors Doctor of Philosophy
Controlling high inflation biggest challenge of budget
Controlling high inflation biggest challenge of budget
Economics

Controlling high inflation biggest challenge of budget

The size of the proposed budget for the upcoming fiscal year (2025–26) has been set at Tk 7.90 trillion. The size of the ongoing fiscal year’s budget under implementation was Tk 7.98 trillion. Accordingly, the budget size will decrease by Tk 80 billion. For the upcoming fiscal year, an allocation of Tk 2.30 trillion has been made for the Annual Development Programme (ADP) which is Tk 350 billion less than the current fiscal year’s ADP allocation. In the new ADP, the target for foreign loans has been reduced by Tk 150 billion. In the upcoming fiscal year, Tk 850 billion will be taken in foreign loans.

Why hasn’t there been significant change in banking sector?
Why hasn’t there been significant change in banking sector?
Economics

Why hasn’t there been significant change in banking sector?

The banking sector is riddled with problems, among which the most alarming is the overwhelming volume of non-performing loans (NPLs). The amount of defaulted loans has increased at an abnormal rate. According to newspaper reports, as of the end of last December, the total disbursed loans in the banking sector stood at Tk. 17,11,402 crore, of which Tk. 3,45,765 crore were defaulted—accounting for 20.20% of all loans. Among these, Tk. 2,91,537.75 crore were classified as “bad loans,” which represent 84.31% of the total NPLs. Loans that fall under the “bad” category usually have very little prospect of repayment. Many banks are facing provisioning shortfalls; they are unable to maintain the required provisions even if they wish to. Thirteen banks are currently under-provisioned, and the total shortfall across the banking sector amounts to Tk. 1,06,130 crore.