Default loans rise by nearly 17pc

Staff Reporter :
Default loans increased by 16.8 per cent year-on-year to Tk 120,656 crore last year as habitual defaulters showed reluctance to repay loans overdue in the banking sector.
The ratio of the default loans accounted for 8.16 per cent of the outstanding loans given out by banks as of December last year compared to 7.93 per cent a year ago, according to data from the Bangladesh Bank.
Some banks faced scams last year, which helps in fueling non-performing loans (NPLs) in the banking sector as a whole, according to a BB official.
NPLs, however, decreased to 10.2 per cent in the final quarter of last year compared to the previous quarter (July-September) when default loans stood at Tk 134,396 crore. The BB official said banks usually try to regularise their default loans recovery or rescheduling in the final quarter of every year to increase their profit.
In addition, some banks traditionally reschedule their default loans ignoring the rules and regulations to paint a rosy picture of their financial health.
As a result, default loans decrease to some extent at the end of a year, which was reflected in the NPL scenario of last year as well.