Bangladesh’s non-performing loans (NPLs) surged to Tk 284,977 crore by September 2024, accounting for 17% of total outstanding loans, which is 2.7 times the combined budget for education and health. State-owned banks are the worst affected, with NPLs at 40.35%. The Centre for Policy Dialogue (CPD) has called for seizing the assets of wilful defaulters, blocking their global transactions through Visa, Mastercard, and SWIFT, and holding three former Bangladesh Bank governors accountable. Political interference and weak governance have fueled the crisis, as bank boards have been filled with politically appointed members. The CPD recommends merging weak banks with stronger ones, though some job cuts will be necessary. To resolve the crisis, CPD urges specialized courts for loan default cases and the establishment of an Asset Management Company (AMC). Liquidity shortages remain a key concern, necessitating urgent banking reforms and high-level political commitment to stabilize the financial sector.
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