Banks regularised Tk 18,552 crore until June under relaxed loan rescheduling rules that were introduced in December last year to help businesses affected by political unrest.

Eight state-owned and specialised banks accounted for almost half of the amount or Tk 9,174 crore, according to central bank statistics.

Although the banks took advantage of the relaxed rules, their classified loans rose during the period.

Under the scope that expired in June, businesses were allowed to reschedule their loans by fixing their down payment and time limit for repayment, and restructure loans by setting up a rational repayment period.

Banks had to obtain a no-objection certificate (NOC) from the central bank before the rescheduling facility became effective.

However, many of the loan rescheduling proposals were rejected, a central bank official said.

For example, he said, Janata Bank had sent proposals to reschedule loans worth Tk 4,487 crore under the relaxed policy, but could finally regularise Tk 2,057 crore during the period.

The official said the central bank gave the NOCs after scrutinising the proposals carefully. The BB also opened a cell at its headquarters to monitor the loans.

Central bank inspection teams, during their regular visits to different banks, took with them a list of the loans rescheduled by the banks under the special facility and checked their status. Among the state banks, Rupali rescheduled the highest amount of loans worth Tk 3,137 crore, followed by Agrani Bank's Tk 2,062 crore, according to the BB.

Of the other state and specialised banks, Sonali rescheduled loans worth Tk 756 crore, while Bangladesh Development Bank regularised Tk 305 crore, Bangladesh Krishi Bank Tk 545 crore, Rajshahi Krishi Unnayan Bank Tk 253 crore and BASIC Bank Tk 59 crore.

However, banks' classified loans increased by 1.82 percentage points to 10.75 percent of their outstanding loans on June 30. On December 31, the amount of their total default loans was 8.93 percent of the outstanding loans.

The state banks' default loans were 23.23 percent on June 30, up from 19.76 percent on December 31.

The central bank had offered the relaxed rescheduling facility in the first week of December last year and banks made the best use of the scope in that month.

As a result, the classified loan situation of the banks improved much in December last year compared to September the same year.

Non-performing loans in banks fell 28.45 percent during the period last year, according to a central bank study.

Banks' provision against bad loans also came down by 21 percent during the period, while provision shortfall slid around 92 percent.