Defaulted loans in the banking sector increased by Tk 7,589.15 crore in the first three months of this year as many of the loan defaulters, who were allowed to reschedule their loans on the ground of pre-poll political unrest became defaulters again.
According to the Bangladesh Bank data released on Monday, defaulted loans rose to Tk 48,172.16 crore as of March 31, 2014 from Tk 40,583.01 crore as of December 31, 2013.
Classified loans in the banking sector were Tk 56,720.10 crore as of September 30, 2013.
BB officials and experts said most of the scheduled banks had misused the central bank’s relaxed loan rescheduling policy that resulted in the surge in defaulted loans in the first quarter of 2014.
Classified loans reached 10.45 per cent of the total outstanding loans of Tk 4,60,758.63 crore in the banking sector as of March 31, 2014.
As on December 31, 2013, it was 8.93 per cent of the total outstanding loans of Tk 4,54,435.26 crore.
The BB on December 23 last year relaxed rescheduling policy for six months for all kinds of loans of the businesses who had suffered losses due to the political unrest.
Under the relaxed policy, the scheduled banks between December 23, 2013 and March 20, 2014 regularised loans worth Tk 14,765 crore taken by the unrest-hit businesses.
BB deputy governor SK Sur Chowdhury told New Age that a number of businessmen had failed to pay instalments against their rescheduled loans to the banks concerned that increased the defaulted loans in recent months.
‘Some of them [businesspeople] did not pay the down payments in line with the conditions of rescheduling,’ he said.
Classified loans in the banking sector also rose as the BB recently identified a huge amount of defaulted loans in different banks, Sur said.
Former BB deputy governor Khondker Ibrahim Khaled told New Age that the central bank’s relaxed rescheduling policy had not put any positive impact on the banking sector as the majority of the banks had misused the policy.
‘We criticised the policy when the BB had taken the initiative. The banks rescheduled the defaulted loans on the basis of their relationship with the clients irrespective of the loans’ merit. The BB should not have taken the relaxed policy,’ he said.
Directors of the scheduled banks gained huge profit by rescheduling the defaulted loans as the banks were not required to keep provision against the rescheduled loans, he said.
Of the total classified loans, those of the four state-owned banks rose by Tk 2,082.68 crore in the first quarter of 2014.
Classified loans in the SCBs increased to Tk 18,688.93 crore as of March 31, 2014 from Tk 16,606.25 crore as of December 31, 2013.
Classified loans in the private commercial banks rose by Tk 4,212.96 crore in the period.
The total classified loans in the PCBs increased to Tk 18,528.62 crore as of March 31, 2014 from Tk 14,315.66 crore as of December 31, 2013.
Classified loans in the four specialised development banks rose by Tk 1,369.76 crore in the first three months of 2014.
The total classified loans in the banks soared to Tk 9,727.32 crore as of March 31, 2014 from Tk 8,357.56 crore as of December 31, 2013.
Classified loans in the nine foreign commercial banks, however, decreased by Tk 76.27 crore in the first quarter of 2014.
The total classified loans in the banks declined to Tk 1,227.28 crore as of March 31, 2014 from Tk 1,303.55 crore as of December 31, 2013.
The BB data showed that a number of banks registered significant amount of defaulted loans in the first quarter of this year.
The classified loans in BASIC Bank increased to Tk 2,557.34 crore as of March 31, 2014 from Tk 1,282.57 crore as of December 31, 2013, those of Sonali Bank to Tk 10,432.43 crore from Tk 9,629.23 crore, those of Janata Bank to Tk 3,343.48 crore from Tk 2,605.26 crore, those of Rupali Bank to Tk 1,588.56 crore from Tk 1,053.91 crore and those of Islami Bank Bangladesh to Tk 2,065.99 crore from Tk 1,364 crore.