Bangladesh banking sector’s default loan rate falls to 31% after major rescheduling

Central bank data shows bad loans fell to Tk 5.57 trillion in December as polls spurred renewals

Bangladesh's banking sector has reported a drop in the rate of default loans, now standing at 30.6 percent, down from 35.73 percent just three months ago.

According to the latest data released by the central bank on Monday, the total amount of defaulted loans has reached Tk 5.57 trillion.

As of December, the total distribution of loans was recorded at Tk 18.21 trillion.

In September, the amount of defaulted loans stood at Tk 6.44 trillion.

Financial analysts attribute this sharp decrease to a surge in large-scale loan rescheduling and renewals before the national election.

The country's defaulted loans first crossed the Tk 1 trillion mark in March 2019, when the figure hit Tk 1.1 trillion.

Since then, the volume of classified loans had seen a steady and rapid climb until the recent end-of-year adjustment.