The amount of defaulted loan in the banking sector increased by 19.41 per cent from Tk 42,725.51 crore as of December 31, 2012 to Tk 51,019.91 crore as of March 31, 2013, according to the latest Bangladesh Bank data released on Monday. The defaulted loan in the banking sector increased by Tk 8,294.40 crore in just first three months of the current year because of loan disbursement on political consideration and poor business environment which resulted in failure of borrowers to repay instalment in time, a BB official told New Age.
He said the defaulted loan had increased by Tk 20,081.35 crore in last year but such type of non-performing loan increased by Tk 8,294.40 crore in just one quarter.
He apprehended that the amount of defaulted loan might increase more in the rest of three quarters of this year.
‘The amount of defaulted loan shows the banks are in severe crisis. They will have to keep aside a huge amount of money as provisions against their newly-spotted defaulted loan, meaning they will face a liquidity crunch,’ he said.
The defaulted loan reached 11.90 per cent of the total outstanding loan in the banking sector as of March 31, 2013. The total outstanding loan was Tk 4,28,693.28 crore in the period.
Of the total defaulted loan, the amount of 30 private commercial banks increased by Tk 4,844.77 crore in the first three months. The total classified loan in the PCBs increased to Tk 17,879.62 crore as of March 31, 2013 from Tk 13,034.85 crore as of December 31, 2012. The total defaulted loan of the PCBs reached 6.23 per cent of their total outstanding loan of Tk 2,87,193.64 crore as of March 31, 2013.
A number of scams have been detected in some private commercial banks which pushed up the amount of defaulted loan in the banks during the period, the official said.
He said that the net profit of the PCBs might decrease significantly this year due to the increasing trend of the defaulted loan.
Classified loan of four state-owned commercial banks rose by Tk 2,888.22 crore in the first three months of this year. The total defaulted loan in the banks soared to Tk 24,403.12 crore as of March 31, 2013 from Tk 21,514.90 crore as of December 31, 2012. The total defaulted loan of the SCBs reached 27.06 per cent of their total outstanding loan of Tk 90,208.07 crore as of March 31, 2013.
Another BB official said the defaulted loan situation of the SCBs was worse than ever because of rampant disbursement of loan on political considerations without considering the impacts on their financial health.
The BB has recently detected unreported defaulted loan amounting to Tk 4,359.11 crore in four SCBs which caused the increase of overall classified loan in the SCBs, he said.
Classified loan of four specialised banks increased by Tk 348.36 crore in January to March of 2012. The total defaulted loan in the four banks soared to Tk 7,678.81 crore as of March 31, 2013 from Tk 7,330.45 crore as of December 31, 2012. The total defaulted loan of the specialised banks reached 27.17 per cent of their total outstanding loan of Tk 28,261.98 crore as of March 31, 2013
The nine foreign commercial banks had registered an increase of Tk 213.04 crore of defaulted loan in the first quarter of the current year. The total defaulted loan in the nine banks soared to Tk 1,058.36 crore as of March 31, 2013 from Tk 845.32 crore as of December 31, 2012. The total defaulted loan of the FCBs reached 4.60 per cent of their total outstanding loan of Tk 23,029.69 crore as of March 31, 2013.
The official said the new BB rule that requires banks to classify any loan if its repayment instalments are not deposited for three consequent months also caused the increase of defaulted loan in the banking sector.
The BB data showed that the defaulted loan increased by 101.74 per cent to Tk 51, 019.91 crore as of March 31, 2013 from Tk 25,289 crore as of March 31, 2012.
The ongoing political unrest is another cause of the increasing trend in banks’ defaulted loan, he said.
A number of entrepreneurs have counted loss in their business due to the ongoing violence caused by the political unrest which ultimately contributed to the upward trend in defaulted loan, he said.
-With New Age input
