Banks non-performing loans soar to Tk 5.50 trillion

The volume of stressed assets in the banking sector enhanced over Tk 5.50 trillion, causing a matter of serious concern for the economy, Center for Policy Dialogue (CPD) in a programme shared on Thursday.

Presenting a keynote paper titled  What Lies Ahead for the Banking Sector in Bangladesh?, CPD Executive Director Dr Fahmida Khatun said the total volume of NPL has increased by more than ten times in the last one decade from Tk 427.25 billion in Q4 in FY12 to Tk 1.46 trillion in Q2 in FY24.

She said the actual NPL would be much higher if loans in special mention accounts, loans with court injections and rescheduled loans were included. Combined together, this amounts to Tk 5.50 trillion, the leading local think-tank mentioned.

The CPD executive director also said that the banks are now used as vehicles for reaching the goal of financial oligarchy under crony capitalism.

When financial capital becomes concentrated in the hands of a few, monopolies extract supernormal profits at the cost of the welfare of the ordinary population.

She made the remark on a dialogue titled "What Lies Ahead for the Banking Sector in Bangladesh?", organised by the CPD at La Vita Hall, Lakeshore Hotel on Thursday.

However, the actual amount of NPL will be much higher if loans in specially mentioned accounts, with court injunctions, and rescheduled loans are included.

She also said that people are now withdrawing money from banks as massive irregularities in the banking sector have eroded their trust.

The CPD suggested the autonomy of the central bank should be upheld in line with the Bangladesh Bank Amendment Bill 2003.