The amount of classified loans at banks soared to Tk 62,172 crore in December last year from Tk 51,371 crore in the same month a year ago, according to Bangladesh Bank data.
The default amount in December 2015 was 9.23 percent of the total outstanding loans, up from 8.96 percent in the same period a year ago.
In 2014, the banks were burdened with classified loans at around 12.86 percent of the outstanding loans while the financial institutions rescheduled loans of around Tk 1,063 crore.
The banks failed to recover the debts from most of the big borrowers, banking sector insiders said.
Officials figures suggest that the banks rescheduled loans amounting to Tk 113,775 crore from July 2013 to December 2015 during the political turmoil following the general election held on 5 January 2013.
Of the total amount, loans of Tk 82,392 crore were rescheduled with Tk 31,383 crore having restructured.
Tk 30,000 crore of the rescheduled figures were regularised under a relaxed policy while the rescheduling of the rest Tk 52,244 crore adhered to the rescheduling policy.
When contacted, a BB official denied making any comment on this issue.
A recent BB circular warned that the banks will face penalty if they fail to manage their risks properly as per the regulatory guidelines.
Economists have expressed grave concern over the rising trend in the default loans. “Mounting default loans are gradually affecting the financial health of the banking sector as well as hampering the economic growth of the country,” they observed.
Centre for Policy Dialogue (CPD) Distinguished Fellow Mustafizur Rahman said the big borrowers are failing to repay their loan installments in time, which is the main reason behind the rise in default loans. “The failure to recover the large loans is a serious threat to the banking sector, which is reducing the banks’ capability to provide new loans,” Mutafizur Rahman said while talking to daily sun.
“The amount of classified loans in the industrial sector has increased last fiscal as the banks did not disburse those loans to the most eligible borrowers,” he said. He also said the central bank should speed up its monitoring process to ensure the quality of loan disbursement to prevent further rise in default loans.