These findings were presented at a dialogue titled ‘What is the future of banking sector in Bangladesh?’ organised by CPD on Thursday.
The CPD said the total amount of NPAs has increased more than three times in the last ten years, from Tk 427.25 billion in the fourth quarter of FY 2011-12 to Tk 1456.33 billion in the second quarter of FY 2023-24. As a result, private banks cannot escape its impact.
However, the actual NPLs would be much higher if loans in special mention accounts, court-ordered loans and rescheduled loans are included. The total gross NPLs, outstanding balance of written-off loans and outstanding balance of total rescheduled loans is Tk 3779.22 billion.
Overall, the huge amount of bad loans has become a threat to the health of the banking sector and banks are not able to keep adequate provisions in this regard.
As of the second quarter of FY 2023-24, the required loan loss provision stood at Tk 989.41 billion, while the actual loan loss provision was only Tk 796.79 billion, which was 80.5 per cent of the requirement.