10 banks face provision shortfall of over Tk 310b

Ten banks, including six private commercial ones, faced a provision shortfall of around Tk 315.49 billion in total at the end of June this year, as per the latest data of Bangladesh Bank (BB).

The banks were National Bank, BASIC Bank, Agrani Bank, Rupali Bank, Bangladesh Commerce Bank, Dhaka Bank, Standard Bank, Bangladesh Development Bank, IFIC Bank and Southeast Bank.

According to the policy, banks are required to maintain a provision of 0.50 per cent to 5.0 per cent of their deposits. However, provisioning requirements can range from 20 per cent to 100 per cent depending on the classification of default loans.

Central Bank data shows that the provision shortfall in the banking sector has risen by Tk 49.63 billion between April and June. As of the end of March this year, the sector’s provision shortfall stood at Tk 265.86 billion.

According to the Bangladesh Bank report, default loans in the banking sector reached Tk 2113.91 billion, or 12.56 per cent of the total loans, by the end of June.

During the June quarter (April-June), classified loans rose by Tk 290.96 billion from Tk 1822.95 billion as of March 30.

The BB data shows that state-owned commercial banks hold the largest share of the classified loans (Tk 1024.83 billion or 32.77 per cent) followed by specialised banks (Tk 57.56 billion or 13.11 per cent), private commercial banks (Tk 999.21 billion or 7.94 per cent), and foreign commercial banks (Tk 32.29 billion or 4.74 per cent).