Banking sector: Default loans surpass 1.5 trillion Taka

[Black_cats]

Banking sector: Default loans surpass 1.5 trillion​

Staff Correspondent
Dhaka
Published: 02 Oct 2023, 02: 02

Defaulted loans between April and June surged by Tk 244.19 billion, resulting in the total amount of Tk 1.56 trillion (156,039 crores) by the end of June.

These defaulted loans represent 10.11 per cent of the disbursed loans in the banking sector.
Just three months earlier, defaulted loans were at Tk 1.31 trillion (131,620 crore) at the close of March.

When the Awami League came to power in 2009, the defaulted loans stood at Tk 224.81 billion. It has now skyrocketed to over Tk 1.5 trillion. In essence, defaulted loans have surged nearly sevenfold over a span of 14 years. This timeframe evidently proved advantageous for defaulters.

Meanwhile, Bangladesh Bank's efforts to reduce defaulted loans have proven unsuccessful despite numerous concessions.

The central bank spokesperson Mezbaul Haque informed Prothom Alo that defaulted loans have indeed increased. One contributing factor is the rise in defaulted loans across 31 banks, which is now reflected in the overall defaulted loan figures.

Some banks faced challenges in rescheduling loans, while others defaulted again after the initial rescheduling, he added.

For instance, Mezbaul said a bank had rescheduled a loan amounting to Tk 7 billion, only to default again due to the inability to meet installment payments. This highlights that certain sizable loans defaulted even after the rescheduling process. It's crucial to analyse additional factors that have played a role in this regard.

Previously, if a company within a business group defaulted, other affiliated companies were barred from obtaining loans. But for a new law, the situation might exacerbate in the days to come, experts noted.

The trend of growing defaulted loans​

Due to the Covid-19 pandemic, customers were not defaulters throughout 2020 and 2021, even without making any installment payments.

However, after the relaxation was lifted in 2022, there has been a noticeable trend of increasing defaulted loans in the banking sector since the beginning of this year. Given this situation and the fear of further increase in defaulted loans, Bangladesh Bank offered a discount on bank loan payments in June.

During that time, the central bank's notification stated that a client would not be classified as a defaulter if they deposited half of the loan installments by the following month of June.

Following Bangladesh Bank's decision, individuals at risk of defaulting on loans were given the opportunity to maintain their status as regular customers by depositing half of the required amount. This leniency was applicable specifically for term loans, which constitute nearly half of Tk 15 trillion loans in the banking sector.

However, despite these provisions, the issue of default loans persists and continues to rise. Bankers express concern that even reliable customers are losing motivation to repay loans due to the recurring implementation of discounts. This has resulted in a liquidity crisis in the banks, impacting their ability to disburse new loans.

In parallel, the Bank Company Act underwent amendments in the Jatiya Sangsad this year. Consequently, defaulters now have the chance to secure loans.

Experts anticipate that this new law might exacerbate the situation of defaulted loans in the days to come.

Previously, if a company within a business group defaulted, other affiliated companies were barred from obtaining loans.

The IMF has set conditions to reduce default loans to 10 per cent for loan approval for Bangladesh. Presently, it seems that this condition is not being met.

Amount of actual default loans​

The current government has been granting substantial concessions to borrowers since 2015. Consequently, defaulters routinely reschedule loans, enabling them to secure new loans only to default once more. In August of last year, Bangladesh Bank published its financial stability report, revealing that the number of rescheduled loans surpasses the default loans in the country's banking sector.

According to the Bangladesh Bank's report, the status of rescheduled loans in the country by the end of 2022 was Tk 2.12 trillion (212,780 crores), constituting 14.40 per cent of the total loans within the banking sector. Therefore, Bangladesh Bank's reported 10.11 per cent of defaulted loans appears to be an underestimation, considering the substantial amount of rescheduled loans.

Additionally, approximately one trillion taka is being withheld due to legal cases. Consequently, the actual defaulted loans amount to more than Tk 4 trillion, accounting for around 30 per cent of the total loans. Notably, the International Monetary Fund (IMF) recommends including rescheduled loans and court-suspended loans in the count of defaulted loans.

The IMF has set conditions to reduce default loans to 10 per cent for loan approval for Bangladesh. Presently, it seems that this condition is not being met.

Banking sector: Default loans surpass 1.5 trillion

The banking sector in Bangladesh is facing increasing defaulted loans, with the amount surpassing 1.5 trillion taka. Despite numerous concessions, the trend of growing defaulted loans continues. This has resulted in a liquidity crisis for banks, impacting their ability to issue new loans. The...

en.prothomalo.com

 

[@blue Ocean]

Banking sector: Default loans surpass 1.5 trillion​

Staff Correspondent
Dhaka
Published: 02 Oct 2023, 02: 02

Defaulted loans between April and June surged by Tk 244.19 billion, resulting in the total amount of Tk 1.56 trillion (156,039 crores) by the end of June.

These defaulted loans represent 10.11 per cent of the disbursed loans in the banking sector.
Just three months earlier, defaulted loans were at Tk 1.31 trillion (131,620 crore) at the close of March.

When the Awami League came to power in 2009, the defaulted loans stood at Tk 224.81 billion. It has now skyrocketed to over Tk 1.5 trillion. In essence, defaulted loans have surged nearly sevenfold over a span of 14 years. This timeframe evidently proved advantageous for defaulters.

Meanwhile, Bangladesh Bank's efforts to reduce defaulted loans have proven unsuccessful despite numerous concessions.

The central bank spokesperson Mezbaul Haque informed Prothom Alo that defaulted loans have indeed increased. One contributing factor is the rise in defaulted loans across 31 banks, which is now reflected in the overall defaulted loan figures.

Some banks faced challenges in rescheduling loans, while others defaulted again after the initial rescheduling, he added.

For instance, Mezbaul said a bank had rescheduled a loan amounting to Tk 7 billion, only to default again due to the inability to meet installment payments. This highlights that certain sizable loans defaulted even after the rescheduling process. It's crucial to analyse additional factors that have played a role in this regard.

The trend of growing defaulted loans​

Due to the Covid-19 pandemic, customers were not defaulters throughout 2020 and 2021, even without making any installment payments.

However, after the relaxation was lifted in 2022, there has been a noticeable trend of increasing defaulted loans in the banking sector since the beginning of this year. Given this situation and the fear of further increase in defaulted loans, Bangladesh Bank offered a discount on bank loan payments in June.

During that time, the central bank's notification stated that a client would not be classified as a defaulter if they deposited half of the loan installments by the following month of June.

Following Bangladesh Bank's decision, individuals at risk of defaulting on loans were given the opportunity to maintain their status as regular customers by depositing half of the required amount. This leniency was applicable specifically for term loans, which constitute nearly half of Tk 15 trillion loans in the banking sector.

However, despite these provisions, the issue of default loans persists and continues to rise. Bankers express concern that even reliable customers are losing motivation to repay loans due to the recurring implementation of discounts. This has resulted in a liquidity crisis in the banks, impacting their ability to disburse new loans.

In parallel, the Bank Company Act underwent amendments in the Jatiya Sangsad this year. Consequently, defaulters now have the chance to secure loans.

Experts anticipate that this new law might exacerbate the situation of defaulted loans in the days to come.

Previously, if a company within a business group defaulted, other affiliated companies were barred from obtaining loans.

Amount of actual default loans​

The current government has been granting substantial concessions to borrowers since 2015. Consequently, defaulters routinely reschedule loans, enabling them to secure new loans only to default once more. In August of last year, Bangladesh Bank published its financial stability report, revealing that the number of rescheduled loans surpasses the default loans in the country's banking sector.

According to the Bangladesh Bank's report, the status of rescheduled loans in the country by the end of 2022 was Tk 2.12 trillion (212,780 crores), constituting 14.40 per cent of the total loans within the banking sector. Therefore, Bangladesh Bank's reported 10.11 per cent of defaulted loans appears to be an underestimation, considering the substantial amount of rescheduled loans.

Additionally, approximately one trillion taka is being withheld due to legal cases. Consequently, the actual defaulted loans amount to more than Tk 4 trillion, accounting for around 30 per cent of the total loans. Notably, the International Monetary Fund (IMF) recommends including rescheduled loans and court-suspended loans in the count of defaulted loans.

The IMF has set conditions to reduce default loans to 10 per cent for loan approval for Bangladesh. Presently, it seems that this condition is not being met.

Banking sector: Default loans surpass 1.5 trillion

The banking sector in Bangladesh is facing increasing defaulted loans, with the amount surpassing 1.5 trillion taka. Despite numerous concessions, the trend of growing defaulted loans continues. This has resulted in a liquidity crisis for banks, impacting their ability to issue new loans. The...

en.prothomalo.com

Naya Diganta Bangladesh Newspaper

The Daily Nayadiganta (দৈনিক নয়াদিগন্ত) is one of the leading newspaper in Bangladesh. Read Naya diganta bd news 24x7 live online.

mybangla24.com

 

[protean]

Banking sector: Default loans surpass 1.5 trillion​

Staff Correspondent
Dhaka
Published: 02 Oct 2023, 02: 02

Defaulted loans between April and June surged by Tk 244.19 billion, resulting in the total amount of Tk 1.56 trillion (156,039 crores) by the end of June.

These defaulted loans represent 10.11 per cent of the disbursed loans in the banking sector.
Just three months earlier, defaulted loans were at Tk 1.31 trillion (131,620 crore) at the close of March.

When the Awami League came to power in 2009, the defaulted loans stood at Tk 224.81 billion. It has now skyrocketed to over Tk 1.5 trillion. In essence, defaulted loans have surged nearly sevenfold over a span of 14 years. This timeframe evidently proved advantageous for defaulters.

Meanwhile, Bangladesh Bank's efforts to reduce defaulted loans have proven unsuccessful despite numerous concessions.

The central bank spokesperson Mezbaul Haque informed Prothom Alo that defaulted loans have indeed increased. One contributing factor is the rise in defaulted loans across 31 banks, which is now reflected in the overall defaulted loan figures.

Some banks faced challenges in rescheduling loans, while others defaulted again after the initial rescheduling, he added.

For instance, Mezbaul said a bank had rescheduled a loan amounting to Tk 7 billion, only to default again due to the inability to meet installment payments. This highlights that certain sizable loans defaulted even after the rescheduling process. It's crucial to analyse additional factors that have played a role in this regard.

The trend of growing defaulted loans​

Due to the Covid-19 pandemic, customers were not defaulters throughout 2020 and 2021, even without making any installment payments.

However, after the relaxation was lifted in 2022, there has been a noticeable trend of increasing defaulted loans in the banking sector since the beginning of this year. Given this situation and the fear of further increase in defaulted loans, Bangladesh Bank offered a discount on bank loan payments in June.

During that time, the central bank's notification stated that a client would not be classified as a defaulter if they deposited half of the loan installments by the following month of June.

Following Bangladesh Bank's decision, individuals at risk of defaulting on loans were given the opportunity to maintain their status as regular customers by depositing half of the required amount. This leniency was applicable specifically for term loans, which constitute nearly half of Tk 15 trillion loans in the banking sector.

However, despite these provisions, the issue of default loans persists and continues to rise. Bankers express concern that even reliable customers are losing motivation to repay loans due to the recurring implementation of discounts. This has resulted in a liquidity crisis in the banks, impacting their ability to disburse new loans.

In parallel, the Bank Company Act underwent amendments in the Jatiya Sangsad this year. Consequently, defaulters now have the chance to secure loans.

Experts anticipate that this new law might exacerbate the situation of defaulted loans in the days to come.

Previously, if a company within a business group defaulted, other affiliated companies were barred from obtaining loans.

Amount of actual default loans​

The current government has been granting substantial concessions to borrowers since 2015. Consequently, defaulters routinely reschedule loans, enabling them to secure new loans only to default once more. In August of last year, Bangladesh Bank published its financial stability report, revealing that the number of rescheduled loans surpasses the default loans in the country's banking sector.

According to the Bangladesh Bank's report, the status of rescheduled loans in the country by the end of 2022 was Tk 2.12 trillion (212,780 crores), constituting 14.40 per cent of the total loans within the banking sector. Therefore, Bangladesh Bank's reported 10.11 per cent of defaulted loans appears to be an underestimation, considering the substantial amount of rescheduled loans.

Additionally, approximately one trillion taka is being withheld due to legal cases. Consequently, the actual defaulted loans amount to more than Tk 4 trillion, accounting for around 30 per cent of the total loans. Notably, the International Monetary Fund (IMF) recommends including rescheduled loans and court-suspended loans in the count of defaulted loans.

The IMF has set conditions to reduce default loans to 10 per cent for loan approval for Bangladesh. Presently, it seems that this condition is not being met.

Banking sector: Default loans surpass 1.5 trillion

The banking sector in Bangladesh is facing increasing defaulted loans, with the amount surpassing 1.5 trillion taka. Despite numerous concessions, the trend of growing defaulted loans continues. This has resulted in a liquidity crisis for banks, impacting their ability to issue new loans. The...

en.prothomalo.com

This country's economy and banking sector is surviving on a fake statistics for a long time. With IMF onboard, it will become difficult for ruling dispensation to continue with the made up numbers. The whole NPA thing would have been shrugged under the carpet has it not been for IMF. With reserves going below $20 billion, IMF will further look in to the black spots (statistics) as their involvement is required more than ever now.

Given the NPA and rescheduled loan already constitute over 20%, any other country would have seen this as a crisis. But Bangos have zero knowledge about these. They just need some exorbitantly costly bridge or nuclear plant to ignore what is staring at their faces. For context, India is doing so much better with our banks.

Indian banks' gross bad loans fall to a 10-year low of 3.9%: RBI's Financial Stability Report

Scheduled commercial banks' net non-performing assets (NPA) ratio fell to a 10-year low of 3.9 per cent in March 2023, the Reserve Bank of India noted in the latest edition of its Financial Stability Report. Risk from global spillovers remained in the ‘high risk category with more than half of...

www.google.com

Once the country passes the LDC, it's game over for Bangladesh. Bangladesh has not invested in manpower or in their education. No one considers Bangladesh for investment given no one trusts their statistics ( can be validated through FDI and FPI numbers). It sought to continue the momentum by sending the manual laborers abroad, however the money launderers found it convenient to deal directly with laborers and convert the ill-gotten money to dollars. Also these laborers seldom achieve anything in host countries and mostly ill-treated.

Big drops in remittance, exports make reserves struggle harsher

Remittance hits 41-month low, export earnings 5-month low

www.google.com

Everything about Bangladesh is fake these days. Look at what they are doing with their budgets. They have been over inflating their budgets for past decade. And their budgets are infact lower than crisis hit Pakistan. Tells you what a shit hole of an economy it is. Their revenue collection is less than $35 billion for a country of 170 million.

https://www.google.com/amp/s/www.dhakatribune.com/amp/opinion/op-ed/324867/projecting-imaginary-revenue

Most of the rich of this country do not put their money in the industry (for diversifying it) but in building up real estate. And we have fools like @Bilal9 populating pages and pages of the Bangladesh Development thread with these renders thinking that is somehow development. All of the projects that Bangladeshis highlight are either being built with borrowed money or by some rich (real estate) which has nothing to do with the ordinary people. Bangladesh is growing in their minds just not on statistics.

Lot of these fools would bring up articles of glowing Bangladesh few years ago but we now see these articles about Bangladesh. Shameful.

Why Bangladesh’s reserves tumble, Sri Lanka’s improve

The situation in Sri Lanka has seen a remarkable turnaround, to the extent that the country fully repaid the $250 million loan it had taken from Bangladesh under a currency swap deal in 2020

www.google.com

Bangladesh is where Pakistan was in 2013-2017, gorging on foreign loans and manipulating the statistics to get more loans. These tactics backfired for Pakistan and so will for Bangladesh. Already rating agencies got wind of the Bangladesh's problems, hence all of them are downgrading already abysmal ratings of Bangladesh.

 

[RealDeal]

This country's economy and banking sector is surviving on a fake statistics for a long time. With IMF onboard, it will become difficult for ruling dispensation to continue with the made up numbers. The whole NPA thing would have been shrugged under the carpet has it not been for IMF. With reserves going below $20 billion, IMF will further look in to the black spots (statistics) as their involvement is required more than ever now.

Given the NPA and rescheduled loan already constitute over 20%, any other country would have seen this as a crisis. But Bangos have zero knowledge about these. They just need some exorbitantly costly bridge or nuclear plant to ignore what is staring at their faces. For context, India is doing so much better with our banks.

Indian banks' gross bad loans fall to a 10-year low of 3.9%: RBI's Financial Stability Report

Scheduled commercial banks' net non-performing assets (NPA) ratio fell to a 10-year low of 3.9 per cent in March 2023, the Reserve Bank of India noted in the latest edition of its Financial Stability Report. Risk from global spillovers remained in the ‘high risk category with more than half of...

www.google.com

Once the country passes the LDC, it's game over for Bangladesh. Bangladesh has not invested in manpower or in their education. No one considers Bangladesh for investment given no one trusts their statistics ( can be validated through FDI and FPI numbers). It sought to continue the momentum by sending the manual laborers abroad, however the money launderers found it convenient to deal directly with laborers and convert the ill-gotten money to dollars. Also these laborers seldom achieve anything in host countries and mostly ill-treated.

Big drops in remittance, exports make reserves struggle harsher

Remittance hits 41-month low, export earnings 5-month low

www.google.com

Everything about Bangladesh is fake these days. Look at what they are doing with their budgets. They have been over inflating their budgets for past decade. And their budgets are infact lower than crisis hit Pakistan. Tells you what a shit hole of an economy it is. Their revenue collection is less than $35 billion for a country of 170 million.

https://www.google.com/amp/s/www.dhakatribune.com/amp/opinion/op-ed/324867/projecting-imaginary-revenue

Most of the rich of this country do not put their money in the industry (for diversifying it) but in building up real estate. And we have fools like @Bilal9 populating pages and pages of the Bangladesh Development thread with these renders thinking that is somehow development. All of the projects that Bangladeshis highlight are either being built with borrowed money or by some rich (real estate) which has nothing to do with the ordinary people. Bangladesh is growing in their minds just not on statistics.

Lot of these fools would bring up articles of glowing Bangladesh few years ago but we now see these articles about Bangladesh. Shameful.

Why Bangladesh’s reserves tumble, Sri Lanka’s improve

The situation in Sri Lanka has seen a remarkable turnaround, to the extent that the country fully repaid the $250 million loan it had taken from Bangladesh under a currency swap deal in 2020

www.google.com

Bangladesh is where Pakistan was in 2013-2017, gorging on foreign loans and manipulating the statistics to get more loans. These tactics backfired for Pakistan and so will for Bangladesh.

I for once hope Lungis surpass India economically. I would rather live with the shame of being behind Lungis than deal with more Lungi illegal immigrants.

 

[protean]

I for once hope Lungis surpass India economically. I would rather live with the shame of being behind Lungis than deal with more Lungi illegal immigrants.

Hopefully, we'll build a bigger wall and shoot at sight at the borders. Implement the NRC and throw the lot into prisons. We need to take stronger measures to safeguard our country. With technological advances, we should be able to control the infestation this time around. Fingers crossed.

 

[RealDeal]

Hopefully, we'll build a bigger wall and shoot at sight. Implement the NRC and throw the lot into prisons. We will take stronger measures to safeguard our country. With technological advances, we'll be control the infestation this time around. Fingers crossed.

Lungis can defeat any drones, ai, fence, wall, sensors etc.. If you build wall, Lungis will simply tunnel underneath… impossible to defend when you surround a country on 3 sides. Even if we build a state of the art wall Lungis will simply take a boat and land somehere on the coast…they have 100% commitment. Only solution to the Lungi menace is to make sure that BD gets richer than India.

 

[protean]

Lungis can defeat any drones, ai, fence, wall, sensors etc.. If you build wall, Lungis will simply tunnel underneath… impossible to defend when you surround a country on 3 sides. Even if we build a state of the art wall Lungis will simply take a boat and land somehere on the coast…they have 100% commitment. Only solution to the Lungi menace is to make sure that BD gets richer than India.

It is up to them. I am not hopeful. However if we could do it to Pakistanis, I am hopeful that we can do it to Bangladeshis. We just have to make it insufferable for existing lungis in India. That's why we need the NRC.

 

[RealDeal]

It is up to them. I am not hopeful. However if we could do it to Pakistanis, I am hopeful that we can do it to Bangladeshis. We just have to make it insufferable for existing lungis in India. That's why we need the NRC.

Nor am i. This pic sums up their mentality

 

[protean]

Nor am i. This pic sums up their mentality

View attachment 957724

I remember back in 2018, they reached finals of Asia cup and lost to India narrowly. Lungis were counting themselves front runners to win the cricket world cup in 2019. It was hilarious how badly they actually did there.

 

[Species]

These tiny little poojeets... Never really recover from the emotional damage they receive when Bilal9 shows them their auqaat... lol

 

[RealDeal]

These tiny little poojeets... Never really recover from the emotional damage they receive when Bilal9 shows them their auqaat... lol

Angry Lungi?

 

[Species]

Angry Lungi?
View attachment 957750

Subhuman appu...

 

[protean]

These tiny little poojeets... Never really recover from the emotional damage they receive when Bilal9 shows them their auqaat... lol

Tiny little? Are you projecting yourself to us? Lol.

 

[Species]

Tiny little? Are you projecting yourself to us? Lol.

No my little coolie, I'm talking about you stunted subhumans. You tiny lot can easily fit into the manholes... lol

The sweepers: A socially excluded community

Sweepers are a socially isolated and neglected community of our society. They are engaged in sweeping and cleaning wastes, human sludge, etc. They are commonly known as "methor" in our country, though nowadays in Chittagong city they are called "shebok" (helper or aide). They were named...

www.thedailystar.net

There are about 3.5 to 5.5 million sweepers in Bangladesh today....They were mainly from Madras, Kanpur, Hyderabad and some other places of South India.

 

[protean]

No my little coolie, I'm talking about you stunted subhumans. You tiny lot can easily fit into the manholes... lol

The sweepers: A socially excluded community

Sweepers are a socially isolated and neglected community of our society. They are engaged in sweeping and cleaning wastes, human sludge, etc. They are commonly known as "methor" in our country, though nowadays in Chittagong city they are called "shebok" (helper or aide). They were named...

www.thedailystar.net

There are about 3.5 to 5.5 million sweepers in Bangladesh today....They were mainly from Madras, Kanpur, Hyderabad and some other places of South India.

Lol. This dumb fvck thinks anyone from south India would come to slum land. Hilarious.