Default loans hit record Tk2.85 lakh crore

Default loans in the banking sector hit Tk2.85 crore for the first time in the country’s history by the end of last month, and the share of sour loans in total disbursals also hit 16-year high at nearly 17%.

The huge accumulation of default loans can be almost entirely attributed to the gross violations of regulations during the ousted Awami League regime, as crony capitalists borrowed massively.

The crisis is expected to worsen in the last quarter of the year as more loans are likely to become classified once they are properly scrutinised, banks could disclose more of their “previously hidden” data and authorities would withdraw unfair concessional policies.

Total disbursed loans stood at Tk16.82 lakh crore by September-end, growing by over 35% in three months.

Banking sector experts claim that with the fall of Awami League autocrats in a popular uprising in 5 August, many banks have started revealing the real figures in their balance sheets.

Racing to meet IMF bailout support requirements, both the government and banking sector bigwigs would in the coming days wind down the biased concessional policies allowed for a select group of borrowers, and scrutinise documents submitted by the borrowers for taking loans – invariably making a number of regular loans irregular.

S Alam Group alone took Tk95,000 crore loan, with undue blessings from the Awami League high-ups, most of which is in the process of being declared classified.

In 2008, when the Awami League government began its long 15-year autocratic rule over the country, default loans stood at Tk22,480 crore.

In over 15 years, the amount has increased 1,168%.