The volume of classified loans in the banking system jumped by more than 19 per cent or Tk 142.86 billion in the first quarter (Q1) of 2018 despite the central bank's close monitoring.
The amount of non-performing loans (NPLs) rose to Tk 885.89 billion during the January-March period of this calendar year from Tk 743.03 billion in the preceding quarter, according to the central bank’s latest data.
The share of NPLs also rose to 10.78 per cent of the total outstanding loans in the Q1 of 2018 from 9.31 per cent in the previous quarter.
On the other hand, the amount of classified loans swelled up by nearly 21 per cent or Tk 151.80 billion in the Q1 of 2018 compared to the same period of the previous year.
The amount of NPLs was Tk 734.09 billion as on March 31, 2017.
When contacted, a senior official of the Bangladesh Bank (BB) said the amount of classified loans normally rises during the Q1 and the Q3 of each calendar year.
"We expect that the amount of NPLs will decline in the second quarter (Q2) of the current calendar year," he added.
The classified loans cover substandard, doubtful and bad/loss of total outstanding credits, which stood at Tk 8,221.37 billion as on March 31 last.
It was Tk 7,981.96 billion three months before. The total amount of outstanding loans was Tk 6,970 billion as on March 31, 2017.
The central banker also said the BB will ask the banks, having NPLs amounting to more than 5.0 per cent of their total outstanding loans, for taking effective measures to reduce the classified loans.
During the January-March period of 2018, the total amount of NPLs with the six state-owned commercial banks (SoCBs) rose to Tk 436.85 billion from Tk 373.26 billion in the previous quarter.
On the other hand, the total amount of classified loans with the 40 private commercial banks (PCBs) reached Tk 372.89 billion in the Q1 of 2018 from Tk 293.96 billion three months before.
The NPLs of the nine foreign commercial banks (FCBs) rose to Tk 21.88 billion during the Q1 of 2018 from Tk 21.54 billion of the previous quarter.
The classified loans with the two development-finance institutions (DFIs) remained unchanged at Tk 54.26 billion in the Q1, BB data showed.
Senior bankers said the amount of NPLs increased significantly during the period under review due to low rescheduling and a relaxed trend of recovery.
"Most of the banks usually remain less serious in recovering their NPLs during the first three months of the calendar year," a senior official of a leading PCB told the FE.
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