Rising default loans in public sector banks: Challenges and solutions

Rising default loans in public sector banks: Challenges and solutions

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The central bank had in June asked four state-run banks to bring down default loans to within 12 per cent as part of their loan conditions from the International Monetary Fund (IMF).

The banks are – Sonali Bank, Agrani Bank, Janata Bank and Rupali Bank.

However, none of the banks have been able to bring this amount within the target, mainly because none of them were instructed on strategies to reduce the amount. As a result, the amount of defaulted loans has actually increased.

Under its loan conditions, the IMF has asked Bangladesh to reduce defaulted loans to 10 percent by 2024.

According to the central bank, the amount of defaulted loans of Sonali Bank rose to 149.88 billion taka in March from 133.4 billion taka in December last year. Janata Bank's defaulted loans saw a rise of 54.86 billion taka in that time, with the current amount standing at 304.95 billion taka.

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