Default loans rise by nearly Tk 18,000cr despite repeated concessions

Despite repeated concessions and policy support for loan defaulters, the country’s banking sector continues to struggle with rising default loans, with the total once again crossing Tk 6 lakh crore at the end of June.

According to updated Bangladesh Bank data, total classified loans stood at Tk 606,555 crore at the end of June, accounting for 32.78 per cent of total outstanding loans in the banking sector.

The figure was Tk 588,704 crore, or 32.26 per cent of total loans, at the end of March. This means default loans increased by Tk 17,851 crore in just three months.

The deterioration has also continued through the first half of the year. At the end of December last year, classified loans stood at Tk 557,217 crore. The sector therefore added Tk 49,338 crore in new default loans during the first six months of this year.

The latest figures underscore the persistent weakness in the banking sector’s loan recovery despite various measures introduced over the years to provide relief to borrowers and facilitate loan restructuring.

Bangladesh’s default-loan burden first crossed the Tk 6 lakh crore mark in September last year, when classified loans reached a record Tk 644,415 crore, equivalent to 35.73 per cent of total outstanding loans.

Although the latest figure remains below that record, the renewed rise above Tk 6 lakh crore highlights the continuing pressure on banks’ asset quality and loan recovery efforts.