Bank default loans rise in Bangladesh

Last updated: October 16, 2010

Dhaka, Bangladesh (BBN)- The classified loans in the banking sector increased to BDT 233.79 billion as of June, 2010, up by BDT 8.96 billion or about 4.0 percent over the previous fiscal year, according to official data.

Of the total, the amount of sub-standard loan was BDT 30.79 billion or 1.14 percent of the total disbursed loan, dubious BDT 18.20 billion or 0.68 percent and the amount of bad loan against the total disbursed loan was BDT 184.79 billion or 8.67 percent, according the central bank of Bangladesh report.

"We’re examining the Bangladesh Bank (BB) report on the banking sector. The situation, particularly in the area of classified loans, is worsening," a top ministry of finance official was quoted by the Financial Express (FE), a local newspaper, as saying.

On the other hand, a top banker in BB said the situation is not that frustratating given the situation stemming from the global economic downswing and the lack of adequate business environment in the country, particularly in the case of power and gas supply.

Four state-owned commercial banks topped the list of classified loans with BDT 121 billion or 20.50 percent of the disbursed loans followed by BDT 65.11 billion or 3.69 percent for private commercial banks. Classified loans for specialized banks were BDT 44.11 billion or 24.61 percent with BDT 3.90 billion or 2.41 percent in classified loans gone to foreign banks during the period.

The statistics of central bank said the amount of classified loans in banking sector was BDT 226.24 billion in December 2007, which was decreased to BDT 224.81 billion in December 2008, BDT 224.82 billion in December 2009 and 233.79 billion in June 2010.

BBN/SSR/AD-16Oct10-11:56 am (BST) 

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