Defaulted loan of bad category increased by 38.38 per cent to Tk 39,445.24 crore in the first nine months of this year due to scheduled banks’ failure in recovering the classified loan amid dull business situation caused by political unrest in the country. The bad loan stood in the banking sector at Tk 39,445.24 crore as of September 30, 2013 from Tk 28,504.04 crore as of December 31, 2012, according to BB data.
The bad loan increased by 71.38 per cent to Tk 28,504.04 crore as of December 31, 2012 in the banking sector as such type of loan was Tk 16,631.76 crore as of December 31, 2011.
The huge amount of bad loan will put an adverse impact on the banks’ net profit after end of this year as they (banks) will have to keep 100 per cent provision against the loan, a BB official told New Age on Thursday.
He said that the businesspeople were now frequently failing to repay their instalment of loans amid dull business situation due to the recent spates of political violence.
There are three types of classified loans — sub-standard loans, doubtful loans and bad loans.
As per the BB regulations, if any defaulter fails to pay instalment of any loan in three months, the loan is considered as sub-standard loan. The banks will have to keep 20 per cent provision against the loan up to next three months.
For doubtful loans, the time duration is between six and nine months instead and the banks have to keep 50 per cent provision against the loan.
If any defaulter fails to pay instalment for nine or more months it would be classified as bad loan and the banks have to preserve 100 per cent provision against the loan.
The BB official said that a majority number of banks had faced a loss situation at the end of third quarter in 2013 as they held huge amount of defaulted loan.
He said that the crisis in the banking industry would be deepened more at the end of this year as the clients were now failing to repay their bank loans due to the dull business situation.
The banks have to calculate their net profit after paying the tax and securing provision against their disbursed loans.
Under the circumstances, the net profit in the majority number of the banks would decline this year due to an increased trend in the bad loans.
The BB data showed that the bad loan reached 69.54 per cent of the total defaulted loan amounting to Tk 56,720.10 crore as of September 30, 2013 in the banking sector.
The four state-owned banks — Sonali, Janata, Agrani and Rupali — held the largest amount of bad loan in the banking sector at the end of third quarter of 2013. Their bad loan stood at Tk 19,227.24 crore or 48.74 per cent in the banking industry.
The bad loan loans in the private commercial banks stood at Tk 13,118.39 crore, that in the foreign commercial banks at Tk 1,152.77 crore and that in the state-run specialised banks in Tk 5,946.86 crore as of September 30.
-With New Age input
