Published : 02 Jun 2026, 09:39 PM
Updated : 08 Sep 2026, 09:12 AM
Bangladesh’s banking sector has recorded a further deterioration in asset quality during the first quarter of the year, with the ratio of non-performing loans (NPLs) rising to 32.62 percent by the end of March.
According to Bangladesh Bank data released on Tuesday, total defaulted loans stood at Tk 5.88 trillion at the end of March, up from Tk 5.57 trillion three months earlier.
The NPL ratio was 30.60 percent at the end of December.
Over the quarter, the stock of bad loans increased by Tk 37.53 billion, continuing a long-running upward trend in the sector.
The central bank reported that total outstanding loans in the banking system reached Tk 18.24 trillion in March, compared with Tk 18.20 trillion in December. During the period, banks extended an additional Tk 314 billion in loans.
Arief Hossain Khan, spokesperson for Bangladesh Bank, attributed the rise in part to weak private-sector credit demand.
“Private-sector credit growth is disappointing. As a result, accrued interest on existing defaulted loans has been added, causing both the total amount and the rate of defaulted loans to increase,” BB Executive Director Arief said.
To stimulate economic activity and encourage borrowing, the central bank is preparing a special Tk 400 billion package aimed at reopening shuttered factories and reviving production, he said.
Ahead of the last national parliamentary election, a substantial volume of troubled loans had been kept from slipping into default through recovery efforts and rescheduling facilities.
Even so, defaulted loans stood at Tk 5.57 trillion at the end of December.
The banking sector’s bad loan problem has expanded steadily in recent years. Defaulted loans first crossed the Tk 1 trillion threshold in March 2019, when the total reached Tk 1.1 trillion.
Since then, the amount has risen relentlessly, highlighting one of the most persistent vulnerabilities in Bangladesh’s financial system.
