The management of the banks has been hit by a severe financial crisis due to the debt collection of 7 banks, which has also shaken their capital stability. Especially 7 public and private banks are suffering from this problem the most. After failing to collect loans on time, the burden of defaulters is now on the shoulders of these banks, and the default loan quota of all of them has already touched the milestone of 55 percent to 99 percent.
In this regard, the central bank has announced new policies on the issue of defaulted loans, which have become more burdensome for the troubled banks. Although the central bank says that this change has been made to make it compatible with the international standard Basel-3. At the same time, it has said that this new rule of loan classification will be effective from April this year.
Under the new rule, all types of loans will be classified as defaulted loans after being overdue for three months. Currently, this period is six months.
Bangladesh Bank says that despite various initiatives, specialized basic banks have not been able to reduce defaulted loans. Of the bank’s total loans, 8,598 crore taka is now defaulted, which is 67.54 percent of the loans disbursed. This is the largest amount of defaulted loans among the six government banks. Janata Bank is in second place among the government banks in terms of default rate. The bank’s defaulted loans amount to 60,345 crore taka, which is 66.15 percent of the loans disbursed.
Padma Bank is at the top in terms of default rate among private banks. The bank’s total defaulted loans are 4,855 crore taka, which is 85.91 percent. Next is National Bank, whose defaulted loans amount to 23,721 crore taka or 55.81 percent.
Bangladesh Bank Governor Dr. Ahsan H. Mansur said that unprecedented irregularities are being seen in the banking sector, as a result of which a huge mountain of defaulted loans has been created. Specific targets have been set for the recovery of defaults ahead and no more defaulters will be kept secret.
He also said, the days of ‘sweeping dirt under the carpet’ are over. Now, defaulted loans will be resolved according to proper rules and gradually move towards international standards. Bangladesh Bank has adopted a zero-tolerance policy on defaulters, meaning no defaulter will be given a break.
According to Bangladesh Bank data, ICB Islami Bank tops the list of defaulters among Islamic banks. The bank’s total defaulted loans are Tk 665 crore, which is 86.64 percent of the total loans disbursed. Bangladesh Commerce Bank is in second place among Shariah-based banks. Out of the bank’s total loans disbursed, Tk 1,293 crore has defaulted, which is 56.12 percent. Among foreign banks, the National Bank of Pakistan (NBP) has not only created a record in terms of defaulted loans, but also recorded the highest number of defaulted loans in the history of the entire banking sector. The bank’s total defaulted loans are Tk 1,354 crore and its default rate is 98.68 percent.
Liberty News observed that there are currently 61 public and private banks operating in Bangladesh. Up to september, 2.85 trillion was the amount of defaulted loans in the banking sector. He also reports that the amount may increase in the future.
LND/SBR
