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Bank default loans surge to Tk1.31 lakh crore

The defaulted loans in the banking sector climbed by aboutTk10, 954 crore to Tk1,31, 621 crore in the January-March quarter.

According to Bangladesh Bank (BB) the defaulted loans increased by 9 percent from three months ago and 16 percent from a year earlier, UNB reports.

Despite different initiative of the central bank, defaulted loans is on a rising trend, which is becoming challenging and a headache, the BB Governor said recently in a conference Association of Bankers Bangladesh (ABB).

In comparison, the default loan figure stood at Tk1,20,656 crore in December 2022.

The defaulted loan volume surged in post Covid-19 period while the businesses abstained from repaying loan installments citing poor business.

During the pandemic the central bank announced a moratorium on regular repayment of loans that helped a large number of borrowers from becoming defaulters.

After withdrawal of the moratorium facility, the defaulted loan volume increased by over Tk 1.20 lakh crore in December last year.

Former governor of BB Dr. Salehuddin Ahmed told UNB that a group of businesses is becoming defaulters willfully and the central bank has to be strict with such people.

He said for lack of good governance, some organized groups have taken more money as loans than their ability, which is a reason behind surge in defaulted loans.