Default loans likely to exceed 30%, raising serious concerns: BB
The banking sector continues to face challenges, including rising non-performing loans (NPLs), which are likely to exceed 30 percent of total outstanding loans by June this year, raising serious concerns, said Bangladesh Bank (BB).
The central bank has forecast a surge in NPLs, which stood at 16.93 percent at the end of September 2024, up from 9.93 percent a year ago.
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"Contributing factors include systemic weaknesses, regulatory gaps, and exploitative practices such as money laundering and illicit capital flight," BB said in the monetary policy for the January–June period of 2025, unveiled today.
The BB highlighted the growing concerns over NPLs, sluggish economic activity, and a slowdown in deposit and credit growth, all of which present formidable challenges for the banking sector.
The central bank noted that several banks are currently facing a significant liquidity crisis due to the rising NPLs, slow deposit growth, and weak loan recovery.
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