Bad debts dogging Bangladesh’s banking sector, says finance minister

Finance Minister AMA Muhith does not find the number of banks operating in Bangladesh too many, but says bad debts are a ‘major problem.’

According to a recent study, only 20 percent of the credits written off by banks in Bangladesh have been recovered in the last 12 years.

It found that bad debts grew faster than credit in the last five years.

“Our banking sector is growing fast. There are 48 banks, which some find too much, but that doesn’t worry me,” Muhith said on Monday while meeting representatives of Norwegian private equity firm Norfund at his office.

He, however, described the level of efficiency at the six state-run banks as ‘very low’.

“The issue they face is non-performing loans; this is a major problem (for the banking sector) in this country,” added Muhith.

The finance minister told the Norfund representatives the government is focused on creating skilled manpower, generating power and energy, and developing physical infrastructure.

Bangladesh targets to eradicate poverty by the next six years, Muhith told the meeting attended by Norwegian Ambassador Sidsel Bleken.