Local banks last year made Tk 10,363 crore of cash recovery from the classified loans, which provided them a spot of respite from their runaway default loans. 

Of the amount, the private commercial banks made the highest recovery of Tk 6,381 crore, followed by state-owned commercial banks at Tk 2,126 crore, according to Bangladesh Bank statistics. 

The specialised banks recovered Tk 1,705 crore and the foreign commercial banks Tk 151 crore.

Default loans rose in the first three quarters of last year to Tk 57,291 crore, which prompted the concerned parties to take up wholesale loan rescheduling, loan write-offs and cash recovery in the last quarter.

Subsequently, the total default loans at the end of 2014 came down to Tk 50,155 crore, which was 9.69 percent of the total outstanding loans.

Banks could recover 20.66 percent of the bad loans as of December 31 last year, with private banks leading the recovery. 

Default loans at private banks stood at Tk 18,426 crore and of the amount, 34.62 percent has been recovered.

Specialised banks recouped 23 percent of their total bad loans of Tk 7,259 crore. 

State banks got back 9.25 percent of their default loans of Tk 22,763 crore, while foreign banks realised 8.79 percent of their total bad loans of Tk 1,706 crore.     

A central bank high official said, of the three measures, the banks fared best with cash recovery.

As default loans increased substantially in the second half of last year, the Bangladesh Bank governor directed all chief executives of the banks to take intensive measures to rein it in.

A high official of Sonali Bank said a task force was formed to increase recovery; the task force continuously monitored the branches so that the loan recovery increases.

An official of Pubali Bank said the private commercial bank's board gives profit targets to them. Even after that, if the classified loan could not be brought down, they were forbidden from transferring the interest accrued on bad loans to income. So, the bank rescheduled loans and also made recovery against those, he added.

An official of Agrani Bank said they not only made recovery against classified loans, they also made cash recovery against the written-off loans.

One of the reasons for falling bad loans is the rescheduling of default loans. They rescheduled bad loans worth Tk 6,216 crore in the last quarter of 2014 alone.

The central bank allowed a relaxed loan rescheduling policy between December 2013 and June 2014, under which banks rescheduled around Tk 20,000 crore.