Private banks overtake state-owned banks in defaulted loans
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February 05, 2023

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SUNDAY, FEBRUARY 05, 2023
Private banks overtake state-owned banks in defaulted loans

Banking

Farhad Hossain
15 June, 2021, 10:40 pm
Last modified: 16 June, 2021, 11:16 am

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Private banks overtake state-owned banks in defaulted loans

At the end of March, the rate was 20.91% in government banks and 5.13% in private banks

Farhad Hossain
15 June, 2021, 10:40 pm
Last modified: 16 June, 2021, 11:16 am
Representational Image. Illustration: TBS
Representational Image. Illustration: TBS

Private banks have been overburdened with defaulted loans and the amount of such loans in these banks is higher than that of state-owned banks this year.

At the end of March, the rate was 20.91% in government banks and 5.13% in private banks. However, in proportion to the total loans disbursed, the rate of default is much higher in government banks.

According to data provided by central bank sources on Tuesday, the default in private banks stood at Tk45,090 crore while in state-owned banks it stood at Tk43,450 crore at the end of March.

At the end of December last year, the default rate of private banks was less than that of government banks. At that time, the default in private banks was Tk40,361 crore and in state-owned banks, it was Tk42,273 crore.

Meanwhile, non-performing loans of private banks increased by Tk4,728 crore and those of state-owned banks increased by Tk3,069 crore from January to March.

Anis A Khan, former chairman of the Association of Bankers Bangladesh, told The Business Standard that since the amount of loans disbursed by private banks is higher than that of government ones, the number of defaulters is also increasing.

Meanwhile, the number of defaulters of the three specialised government banks – Krishi Bank, Rajshahi Krishi Unnayan Bank and Prabasi Kalyan Bank –did not increase much in March compared to December. However, the amount of default of foreign banks has increased by Tk420 crore.

Niaz Uddin Khan, regional head, Woori Bank, told The Business Standard said that the impact of the damage caused by Covid-19 last year began this year and we have to move on accepting this.

Dhaka Chamber President Rizwan Rahman told The Business Standard that when an organisation declares a dividend, it is based on the previous year's performance. In this case, too, the effect of Covid-19 is visible this year. It may increase further.

He added that traders are continuing production only to keep the business running. But due to the overall sluggishness in demand, just as sales of goods have declined, so has the collection of sales. As a result, banks are having problems paying the instalments.

Bangladesh / Economy / Top News

private banks / State-owned banks / Defaulted loans

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