Borrowers Seek Restructuring as Defaults Cross Tk345,000cr

The Power Division has requested Bangladesh Bank's intervention to recover Tk 8.50 billion stuck with the financially troubled National Bank Limited (NBL), which has failed to transfer the remaining funds from a total of Tk 13.29 billion deposited by the Bangladesh Power Development Board (BPDB) across three accounts in its Motijheel and foreign exchange branches.

After interest rates were liberalized in May 2024, agricultural loan rates surged to 15–18%, up from a previous cap of 8%, resulting in a notable decline in disbursements. In the first eight months of the current fiscal year, banks disbursed Tk 22,126 crore in agricultural loans, which is Tk 1,565 crore or 6.60% less than the same period last year.

Over 60 large borrowers in Bangladesh have applied for loan restructuring amid severe financial distress driven by factors such as the COVID-19 aftermath, the Russia-Ukraine war, global economic slowdown, political instability, and currency devaluation. The Bangladesh Bank formed a five-member committee in January 2025 to assess the proposals, with loan sizes ranging from Tk150 crore to Tk12,500 crore and most seeking restructuring over a 15-year term.

According to Bangladesh Bank data, by the end of December 2024, the top 10 banks in Bangladesh wrote off Tk 41,129 crore in bad loans, nearly half of the total Tk 81,578 crore written off across the banking sector. Sonali Bank topped the list with Tk 8,568 crore, followed by Agrani (Tk 5,627 crore) and Janata (Tk 5,126 crore). Private banks like Southeast, UCB, and Prime Bank each wrote off over Tk 3,000 crore.

southeast Bank has been embroiled in a major financial scandal involving embezzlement, irregular recruitment, fund mismanagement, and loan-related anomalies. Following the change in government, internal audits and Bangladesh Bank inspections revealed these irregularities.

In the fourth quarter (October-December) of 2024, the weighted average interest rates on both deposits and advances increased, driven by liquidity shortages in some banks. To attract deposits, banks offered higher interest rates, leading to a rise in the average deposit rate to 6.04%—a 2.7 percentage point increase from the previous quarter.