In the first three months of the current year, defaulted loans of the banks increased by Tk 1,067 crore or five percent mainly due to risky lending, sluggish business activities and seasonal factors.
On March 31, the banks' defaulted loans stood at Tk 23,584 crore compared to Tk 22,481 crore in December last year.
According to Bangladesh Bank (BB) statistics, the state-owned banks' (SOBs) defaulted loans increased by Tk 495 crore or four percent and those of private commercial banks by Tk 547 crore or 10 per cent.
But defaulted loans of foreign commercial banks remained unchanged over the last three months while those of specialised banks increased slightly.
A top official of Agrani Bank said the rise in defaulted loans in the first three months of the year is due to seasonal factors. In December, the banks launch massive drive for recovery of loans by the year end, and slacken the drive after December, he mentioned.
And a high official of Sonali Bank claimed that due to the global meltdown many businessmen are deferring repayment of their bank loans. The banks are also putting less pressure so that businesses are not hampered, he said.
A Bangladesh Bank official however said besides these causes, risky lending by the banks led to a rise in defaulted loans.
Normally banks are expected to limit their lending to 80 per cent of their deposits. But many banks went for lending above 90 percent, and some for even above 100 percent of their deposits, he said.
Loans to unproductive sector have also increased. BB officials termed this sector a risky sector.
A recent study by the BB revealed that car loan, marriage loan, consumers credit, etc increased by 31 to 146 percent. Defaulted loans may have gone up also for this cause.
According to BB statistics, on March 31, defaulted loans of the SOBs totalled Tk 13,259 crore or 26.49 percent of their outstanding loans as against Tk 12,764 crore or 25.44 percent in December last year.
Defaulted loans of private commercial banks stood at Tk 6,245 crore or 4.72 per cent in March compared to Tk 5,698 crore or 4.44 percent in December.
In foreign commercial banks, default loans totalled Tk 286 crore or 1.91 percent in March and the amount was the same in December.
Defaulted loans of specialised banks stood at Tk 3,794 crore or 25.94 percent of their outstanding loan in March as against Tk 3,732 crore or 25.45 percent in December last year.
Source: The Daily Star, May 20, 2009
