Dhaka, Bangladesh (BBN) - Overall shortfall in provisioning against loans in the banking system of Bangladesh swelled by more than 20 per cent during the first nine months of this year.
The total amount of provisioning shortfall rose to BDT 81.27 billion as on September 30 from BDT 67.67 billion nine months ago, according to the central bank’s latest statistics.
The shortfall was BDT 79.80 billion as on June 30 this year.
Talking to the BBN, a senior official of the Bangladesh Bank (BB) said higher growth in non-performing loans (NPLs) pushed up the amount of provisioning shortfall with the banks during the period under review.
The amount of classified loans rose by nearly 34 per cent or BDT 250.67 billion to BDT 993.70 billion as on September 30, from BDT 743.03 billion as on December 31, 2017, the BB data showed.
The public sector banks have faced more provisioning shortfall than that of the private commercial banks, the central banker explained.
A total of 12 banks, out of 57, failed to keep the requisite provisions against loans, particularly the NPLs, in the third quarter (Q3) covering July-September period of 2018, the BB data showed.
The banks are: Sonali, Agrani, Rupali, BASIC, AB, Bangladesh Commerce, Mutual Trust, National, Premier, Social Islami, Shahjalal Islami and Standard.
Nine banks, including four state lenders, faced such provisioning shortfall during the final quarter (Oct-Dec) of 2017, while the number was 13 in the second quarter (April-June) of 2018.
It was 12 in the first quarter (Jan-March) of the current calendar year.
Under the existing BB regulations, the banks have to keep 0.25 per cent to 5.0 per cent provision against loans under general category, 20 per cent against substandard category, 50 per cent against doubtful loans, and 100 per cent against bad or loss category.
The banks usually keep the required provisions against both classified and unclassified loans from their operating profits in order to mitigate risks.
BBN/SSR/AD