Non-performing loans (NPLs) in the country’s banking sector have sharply risen in the first three months of this year due to withdrawal of moratorium facility, announced amid pandemic.

At the end of March of this year, the NPLs in the banking sector stood at Tk11, 3440.86 crore, up by Tk10, 167 crore or 10 per cent from December last year as per the latest data of the Bangladesh Bank.
Nagad

The bad loan was Tk10, 3273.78 crore at the end of December last year.

Bankers said the defaulted loan had increased fast in January to March this year due to mainly loan moratorium facility offered by the central bank in mid-2020 when the Covid-19 pandemic hit the country.

The loan moratorium facility for borrowers ended on December 31 last year.

Under the moratorium facility borrowers were not recorded as defaulters even if they failed to pay any installments in 2020.

In 2021, borrowers remained out of loan default on condition of payment of just 15 per cent of their scheduled installments.

Contacted, state-run Sonali Bank Managing Director and CEO Ataur Rahman Prodhan told The Business Post that the loans which were unclassified amid pandemic due to the regulatory forbearance had now turned into classified loans.

This is the reason for the rising trend of non-performing loans (NPLs) in the banking sector.

The NPLs rate stood at 8.53 per cent at the end of March this year, up from 7.93 per cent three months earlier.

At the end of March this year, defaulted loans at the state-run commercial banks stood at Tk48737.03crore, which was Tk44,976.84 crore three months earlier.

The amount was Tk57803.68 crore at the private commercial banks at the end of March, up from Tk51, 520.82 crore in December last year.

At the same time, NPLs at the specialized banks stood at Tk4015.56 crore, up from Tk3990.87 crore three months earlier.

The amount was Tk2884.58 crore at the foreign commercial banks, up from Tk2, 785.15 crore in December last year.

This correspondent contacted three high officials of three private commercial banks who said the borrowers regularized their loans with paying only 15 per cent which were payable last year.

Now, most of the borrowers are unwilling to pay bank loans under the excuse of ongoing volatility in the forex market, they pointed out.

Despite sharp increase in the NPLs, The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has urged the Bangladesh Bank to introduce a fresh loan moratorium facility till December this year.

Recently, the apex body of businessmen has placed their proposal to the central bank governor mentioning the pressure on supply chain and ongoing volatility in the global economy.

However, the central bank is yet to take any decision over the issue.

High amount of bad loans
The scam-hit Janata Bank has the highest defaulted loans in the banking industry. At the end of March this year, the bank’s NPLs stood at Tk13,125 crore, up by 5.7 per cent three months earlier.

State-run Sonali Bank’s NPLs stood at Tk11,877 crore, Agrani Bank’s at Tk9, 447 crore, Rupali Bank’s at Tk5, 834 crore.

Private commercial Islami Bank’s NPLs stood at Tk4, 772 crore and National Bank’s at Tk6374 crore at the end of March this year.