According to a report by Bangladesh Bank, 63.28% of classified loans among the country’s 61 banks are concentrated within just 10 banks. This data, up to September 2023, also highlights that 29 banks would fail to maintain the minimum required capital-to-risk-weighted asset ratio (CRAR) if their top borrowers defaulted.
Although there was a slight decline in classified loans from the previous quarter, the concentration of loans among the top 5 and top 10 banks remains concerning. The top 5 banks’ classified loan concentration was 45.12% by September 2023. The proportion of Bad and Loss (B/L) category loans within total classified loans increased significantly to 87.72% by September 2023.
The executive director at the Policy Research Institute (PRI), pointed out that these 10 banks have become inactive, with classified loans exceeding Tk98,000 crore. Additionally, loans amounting to Tk1 lakh crore have been rescheduled in the banking sector.
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