Over the past decade until last December, non-performing loans (NPLs) in Bangladesh surged more than threefold to Tk1.45 trillion, exacerbating banks’ liquidity challenges. When considering rescheduled loans, this figure rises to Tk3.78 trillion, as per a CPD survey report. Additionally, Tk1.78 trillion in unpaid debts are pending in loan courts, bringing the total default loans to Tk5.6 trillion.
Dr. Fahmida Khatun, Executive Director of the Centre for Policy Dialogue, presented these findings at a seminar titled ‘What lies ahead for the banking sector of Bangladesh.’ She highlighted governance issues, noting the weakening independence of Bangladesh Bank due to the Financial Institutions Division’s establishment. The presentation emphasized NPL concentration in both state-owned and private banks, with poor expenditure-income ratios indicating mismanagement. Liquidity challenges persist, with excess liquidity declining and real deposit rates turning negative.
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