Default Loan Rises Further

Despite Bangladesh Bank efforts in bringing out business from default culture, the uptrend in classified loans continue for the consecutive third quarter in September, the Dhaka Tribune reported. It rose to 11.6% in July-September quarter from 10.75% in the previous quarter, according to Bangladesh Bank data. The rate had dropped to 8.93% in December last from 12.79% in the previous quarter, thanks to huge loan rescheduling taking advantage of a relaxed policy. The central bank measure failed to help sustain the reduced default loan and got back to the previous uptrend from March quarter, rising to 10.45%. Finance Minister AMA Muhith recently said the country’s business has come out of default loan culture and expressed the hope it would be reduced further to 8% from existing 11%. The amount of total default loans stood at Tk57,300 crore in September, increasing by around Tk6,000 crore from Tk51,344 crore in June, according to Bangladesh Bank data. The four state-owned banks accounted for 36% or Tk20,800 crore of the total default loans.