The amount of non-performing loans (NPLs) in Bangladesh’s banking sector has once again crossed Tk 600,000 crore. According to updated Bangladesh Bank data, NPLs increased by Tk 17,851 crore over the three months from March to June this year.

An analysis of the NPL data shows that 32.78 per cent of total loans in the banking sector have become non-performing. In other words, Tk 32.78 out of every Tk 100 lent by banks is now classified as non-performing. This money is no longer contributing to the economy, while depositors’ funds have been put at risk.

People familiar with the sector say that following the political changeover in August 2024, the true extent of long-standing irregularities, fraud and loans taken through anonymous or proxy borrowers in the banking sector is now coming to light. As a result, NPLs have reached an alarming level.

Fahmida Khatun, distinguished fellow at the private research organisation Centre for Policy Dialogue (CPD), told Prothom Alo, “Non-performing loans did not emerge suddenly. The review of the quality of bank assets is now exposing the sector’s actual weaknesses. Previously, many troubled loans remained hidden through rescheduling, special concessions and accounting adjustments.”