Fourteen banks in Bangladesh have been found breaching lending limits, leading to a severe liquidity crisis and increasing bad loans. As of December 2024, banks like National Bank, Padma Bank, and AB Bank exceeded their loan-to-deposit ratio (ADR) limits of 87% for traditional banks and 92% for Islamic banks, with some banks reaching ADRs as high as 128%. This resulted in the banks struggling to recover loans and repay depositors. The banking sector’s non-performing loans (NPLs) have risen to 345,765 crore BDT, with 20.20% of total loans turning into bad debts. Additionally, provisions to cover potential losses have fallen short, with a provision deficit exceeding 106,000 crore BDT by December 2024, up from 55,300 crore BDT in September 2024. This situation has raised concerns about the sustainability of banks, as experts urge better regulatory oversight and institutional capacity to prevent further risks to depositors.
Source for more details:
