In just three months ending December 2024, the capital shortfall of 20 Bangladeshi banks soared by Tk1.18 lakh crore, reaching Tk1.72 lakh crore due to a sharp rise in non-performing loans (NPLs), now accounting for 20.2% of total loans. Thirteen banks have provision shortfalls totaling Tk1.09 lakh crore, with major deficits reported in Janata Bank (Tk52,890 crore), Krishi Bank, and several Islamic banks. Experts attribute the crisis to poor investments, hidden losses, and weak governance. The aggregate Capital to Risk Weighted Assets Ratio (CRAR) dropped to 3.08% in December from 6.86% in September, far below the Basel III requirement. Bangladesh Bank warns that the shortfall may worsen due to stricter provisioning rules from March 2025, possibly leading to mergers or regulatory interventions for banks that fail to recover.
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