Banks' written-off loans last year more than doubled year-on-year, as banks looked to bring down their default loan portfolio and clean up their balance sheet.

In 2013, banks wrote off loan amounting Tk 6,893 crore, in contrast to Tk 2,992 crore in 2012, according to central bank statistics.

The state-owned commercial banks alone accounted for Tk 4,573 crore of the write-offs, up 288 percent year-on-year. Sonali wrote off Tk 2,177 crore, Agrani Tk 1,313 crore and Janata Tk 1,083 crore. Rupali Bank did not write-off any

loan in 2013.
As for the Tk 2,320 crore written off by private banks, four banks alone made up half of the amount.

 
Meanwhile, a high official of Janata Bank said the loan write-offs in 2013, which was an increase of almost 275 percent over the previous year's, does not reflect the true picture.

Loans are usually written-off at the end of the year, and the state-owned bank did not have a functioning board in the last three months of 2012. As a result, mass write-offs had to be done in 2013 to make up for the previous year's.

Efforts to recover the amount though are ongoing, he said. Last year, the bank recovered Tk 130 crore, which went directly to their income.

A high official of Sonali Bank echoed the same, adding that the bank recovered Tk 436 crore from the written-off loans in the last three years.

The practice of writing off loans started in 2003, with Tk 30,728 crore loans written off until December 31 last year. Banks make provisioning against the amount, and when the loans are recovered they boost the income and profitability.