Dhaka, Bangladesh (BBN) – The amount of default loans in the country’s banking system increased further in the third quarter (Q3) of 2014 as a portion of rescheduled loan turned into classified ones.
According to provisional figures, the volume of non-performing loans (NPL) increased by 11.40 per cent to BDT 572.00 billion in the July-September period of 2014 from BDT 513.44 billion in previous quarter of this calendar year. It was BDT 481.72 billion in the Q1 in 2014.
During the Q3, the share of NPL in the total outstanding loans of the banking system rose to 11.60 per cent from 10.75 per cent in the previous quarter. It was 10.45 per cent in the January-March period of this calendar year.
“We’re still working to finalise the statement of NPL as of September 30 this year,” a senior official of the Bangladesh Bank (BB) told the BBN in Dhaka.
He also said the statement is set to approve by the higher authorities on Sunday.
 “The amount of NPL has increased during the period under review because of the rise in default loans at state-owned banks including the scam-hit BASIC Bank limited,” the central banker explained.
The central bank earlier relaxed loan rescheduling provisions, which many state-run banks interpreted liberally and de-classified large amounts of loans.   Later, the BB classified many of these loans back as they failed to meet the criteria it had set, according to the BB officials.

“A portion of rescheduled loan has already turned into classified ones because of weak monitoring and supervision of the commercial banks concerned,” another BB official explained.

On December 23 last year, the central bank relaxed the loan rescheduling policy for the next six months to facilitate financing for the businesses, affected by political unrest.

BBN/SSR/AD-14Nov14-12:40 pm (BST)