In the last three months of the previous year, Bangladesh saw the highest-ever recovery of bad loans, amounting to nearly 10,000 crore taka, with a significant increase compared to previous years.
According to a report from Bangladesh Bank, between October and December of last year, 9,792 crore taka worth of bad loans were recovered. This marks the highest recovery amount in the country’s history. In comparison, during the same period in 2023, the recovery was 7,960 crore taka. Bank officials have pointed out that the government change and the pressure to show a clean balance sheet by the end of the year have played a role in this surge in recoveries.
Banking sector experts say that there is always pressure to reduce non-performing loans (NPLs) at the end of the year, leading banks to focus on cash recovery and loan rescheduling. In addition, with the change of government, many loan defaulters who had been absconding are now paying off their debts due to fear of repercussions.
Private commercial banks were the leaders in recovery, collecting 8,026 crore taka in the last quarter of the year, while state-owned banks recovered 1,456 crore taka. Specialized and foreign banks contributed much less, with 279 crore taka and 30 crore taka, respectively.
Despite the increase in loan recovery, the total amount of non-performing loans continues to rise, reaching a staggering 3.45 lac crore taka at the end of the year.
Sources indicate that some major business groups, such as the controversial S Alam Group, are now showing the true extent of their bad loans after being freed from the influence of the previous government. This, too, has contributed to the growing volume of non-performing loans.
Additionally, recoveries from loan write-offs have also increased. In the last three months of the year, 523 crore taka was recovered from written-off loans, showing an upward trend in recovery.
LND/BG
