Bank NPLs break through Tk1 lakh crore

Non-performing loans (NPLs) in the country’s banking sector crossed the Tk1 lakh crore mark after 27 months, despite the Bangladesh Bank’s biggest efforts to prevent this from happening.

As of September earlier this year, the NPL volume stood at Tk 1,01,150 crore, or 8.18 percent of total outstanding loans, according to the latest data from the Bangladesh Bank.

That figure was Tk 1,945 crore higher than Tk’s 99,205 crore figure in June earlier this year.

Bankers and insiders said the volume of non-performing loans fell last year, as the central bank offered a facility for a moratorium on structured loans for all customers.

However, it was alleged that this year the facility was provided to clients on the basis of bank-client relationships which resulted in an increase in NPLs.

NPLs rose in the third quarter (July-September) of this year, as most banks suspended the central bank’s support policy for bad customers, sources added.

Companies have benefited from the moratorium facilities on loan payments throughout the last year affected by Covid-19.

The current moratorium facilities continue depending on the bank-client relationship.

As of September of this year, the NPLs of state-run banks amounted to Tk 44,016.38 crore, or 20.07 percent of their total loans disbursed.

NPLs of private banks stood at Tk 50,743.14, foreign banks Tk 2,691.78 and specialist banks Tk 3,699 crore, according to central bank data.

The total outstanding loans in the banking sector amounted to Tk 1245,391.58 crore during the period.

Salehuddin Ahmed, former governor and economist of the Bank of Bangladesh, said borrowers got special benefits in 2020 due to the pandemic, but even now they still have that benefit.

The Bangladesh Bank has granted concessions until next December to repay the loans. With this facility, a client is no longer in default on the loan amount they are supposed to repay this year, unless they pay a certain amount by next December, he also said. .

“Even so, bad debts are on the increase. Perhaps one of the reasons is the increase in loan disbursements at a later date. However, I think banks need to be more stringent in collecting debts. Bad debts However, it is also necessary to consider from the side of the affected traders, because although people have gone out to work, normalcy has not yet returned, ”Salehuddin added.

Bangladesh Bank spokesperson and executive director Md Serajul Islam said, “If you notice, the percentage of overdue loans has decreased. But it is a good sign. In fact, each quarter adds interest, which may have increased the overall debt. a little. In addition, last year we saw that banks could not disburse their loans in this way due to low demand. Over the past few months, this has become somewhat normal. As a result, the total amount of NPLs increased compared to the second quarter. “

Bankers, however, say the actual figure is several times higher than the country’s total NPL figure.

Many groups have not been able to collect their debts year after year. Again, the same loan is rescheduled multiple times and the loan is kept regular, they added.