Delinquencies Jump After Bangladesh Central-Bank Move Backfires

Bangladeshi banks are facing another jump in already-crippling levels of bad debt as a move by the central bank to ease the situation backfires, Bloomberg News reported. In an effort to revive credit growth, Bangladesh Bank in May introduced an amnesty program that allowed delinquent borrowers to clean up their books by making a small upfront payment and then clearing the rest of their debt over 10 years at favorable interest rates. But it also triggered a rush by healthy companies to reschedule debt on the same terms, which now threatens to overwhelm the banks. “I’m traumatized by non-performing loans,” said Anis A. Khan, managing director of Dhaka-based Mutual Trust Bank Ltd. Read more