The amount of 'doubtful loan' (DL) in the country's banking sector increased substantially in the July-September period of this year due to the recent scams.

An official of the Bangladesh Bank (BB) attributed the rise in the DL to sluggish business activities, especially after the recently detected loan-related irregularities in some public sector banks.

On the other hand, a former BB high official told the FE Sunday that one of the possible causes behind the rise in the DL could be aggressive loan disbursement by the commercial banks without evaluating feasibility properly.

The DL is usually non-performing loans, on which interest is overdue and whose full collection of principal is uncertain.

The amount of the DL increased by Tk 16.25 billion in the third quarter of this calendar year (July-Sept 2012) than that of the previous quarter (April-June).

By the end of this September, the total DL in the banking sector was Tk 51.78 billion or 1.25 per cent of the total outstanding loans. The amount was Tk 35.535 billion or 0.88 per cent of the total loans in June.

According to the BB statistics, the four state-owned commercial banks and two specialised banks saw the highest increase in the DL in the third quarter. Of them, Sonali Bank Limited topped the list.

The total DL at Sonali Bank stood at Tk 10.78 billion or 3.27 of the total loans in September, which was Tk 4.23 billion in June.

The BB high officials said the amount of DL has increased significantly because of the recent Hall-Mark incident and poor loan recovery rate.

The DL of Janata Bank Limited and Agrani Bank Limited stood at Tk 3.22 billion or 1.20 per cent and Tk 4.02 billion or 2.07 per cent respectively by the end of September.

News: The Daily Financial Express/Bangladesh/3rd-Dec-12