Bangladesh
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‘Liberal policy’ of loan rescheduling increased risk: BB

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Bangladesh Bank (BB) has said in a report that the bank loans at risk have increased rapidly due to the ‘liberal policy’ of rescheduling during the tenure of the Awami League government.

The central bank made the remarks in its financial stability report published on Sunday, according to bdnews24.com.

The amount of the rescheduled loan of the banks reached over Tk 910 billion just in 2023, which is the highest so far for a single year.

At the end of the last year, the loans rescheduled in the banking sector stood at Tk 2.88 trillion, around 18.75 per cent of the total loans disbursed by the banks.

The International Monetary Fund (IMF) describes such credits as “stressed" loans.

A review of the central bank data shows the amount of default loans in the country's banking sector was Tk 1.33 trillion in December last year.

The banks have written off loans worth Tk 716.99 billion as they could not be recovered normally. At the end of last year, the total amount of risky loans in the banking sector was Tk 4.94 trillion. Thus, around 32.10 per cent of the total loans are at risk.

The total unpaid debt was Tk 15.39 trillion at the end of 2023.

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