Banks’ non-performing loans (NPL), also known as classified
credits, have increased alarmingly, which implies low base of assets, capital
and income of the banks, according to Bangladesh
Bank (BB) sources.
Statistics released by the central
bank Thursday showed that non-performing loans both in state-run and
private banks stood at 10.03 percent of the total outstanding loans of the
banks at end of the year 2012.
The amount of classified loans stood at 6.12 percent of
bank’s total outstanding loans in December 2011.
Total classified loans of banks stood at Tk 427.25 billion
at the end of 2012, up from Tk 226.44 billion during the same period a year
ago.
Out of total classified loans, the share of four state-owned
banks is Tk 215.15 billion for 2012.
“The increase in NPL is alarming for the banking sector. It
implies low base of capital adequacy, weakened banks’ asset and lessen profitability
of banks,” a BB official said Saturday.
BB data shows that the recovery of industrial terms loans in
the first quarter of the current financial year (FY) was Tk 81.91 billion.
During July-January period of this fiscal, the recovery of
farm loans stood at Tk 79.52 billion.
A high official of a private bank, however, claimed that the
increase in classified loans was because of the tightened rules enforced by the
central bank effective from October 2012.
“The BB has curtailed timeline for rescheduling and
provisioning loans which resulted in broadening the amount of non-performing
loans,” said the official, seeking anonymity.
A BB official, while replaying to this comment, said the
central bank had to go for enforcement of the tightening rules to comply with
international standards.
News Source:
Daily Sun Bangladesh
Dated:-17-Feb-2013
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