At the end of September this year, eight scheduled banks, including four state-owned ones, had a Tk19, 833 crore provision gap, indicating their deteriorating financial condition, which is mostly the result of rising bad loans. Agrani Bank, BASIC Bank, Janata Bank, Rupali Bank, Bangladesh Commerce Bank, Mutual Trust Bank, National Bank, and Standard Bank are the banks in question. Due to its increasing non-performing loan portfolio, National Bank has the biggest provision shortfall of all of them at Tk7,474 crore. It had the largest percentage of non-performing loans among private banks at the time, at Tk11, 336 crore.
The state-run Agrani Bank’s provision shortfall was Tk3, 521 crore, BASIC Bank’s was Tk4, 562 crore, Janata Bank’s was Tk599 crore, and Rupali Bank’s was Tk3014 crore. In addition, the provision deficiency at Standard Bank, Mutual Trust Bank, and Bangladesh Commerce Bank were Tk146.77 crore, Tk171 crore, and Tk345 crore, respectively. According to data from the Bangladesh Bank, the overall provision gap in the banking industry was Tk13, 529 crore at the end of September since certain banks had surplus provisions.
Banks are required to set up 0.5 percent to 5 percent of their operating profits as a reserve against general category loans, 20 percent against substandard category loans, 50 percent against doubtful category loans, and 100 percent against bad or loss category loans.
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