23% Rise in NPL Recovery Fails to Offset Surging Bad Loans

Industry: Bank, Financial

In the October–December quarter of 2024, banks in Bangladesh recovered Tk 9,791 crore in non-performing loans (NPLs), marking a 23% increase from Tk 7,960 crore in the same period of 2023. Despite this nominal rise, the NPL recovery ratio—which indicates the percentage of recovered loans relative to total outstanding defaulted loans—declined to 3.44% from 5.12% in the corresponding quarter of the previous year. This decline highlights a troubling trend: while recovery amounts have grown, they haven’t kept pace with the surge in defaulted loans. Financial experts attribute this to a deeply rooted culture of loan defaulting and insufficient recovery measures by banks. They emphasize the need for more assertive recovery strategies and stricter enforcement by the central bank to address the escalating NPL crisis effectively.

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