Dhaka: Bangladesh Bank (BB) Governor Dr. Ahsan H Mansur today informed that the central bank is working to bring back people’s confidence in the banking sector to take the country’s economy to a better position.
According to Bangladesh Sangbad Sangstha, the BB chief, while speaking at a press briefing at the central bank headquarters in the city, mentioned that there is no immediate crisis expected from the balance of payment or the banking sector due to the comfortable level of foreign-currency reserves. Dr. Mansur emphasized the importance of increasing deposits to strengthen the banking sector.
The report from Bangladesh Bank revealed that by the end of December 2024, aggregate deposits with banks increased by Tk 345.17 billion, reaching over Tk 17.77 trillion. Dr. Mansur stated that as of yesterday, Bangladesh’s gross foreign exchange reserves surpassed US$26 billion, a significant rise from over $21 billion according to the IMF’s BPM-6 calculation standard.
Dr. Mansur highlighted the issue of non-performing loans (NPLs), which reached a record Tk 345,764 crore at the end of December last year, representing 20.20 percent of total disbursed loans. He noted that NPLs were Tk 284,977 crore at the end of September last year, accounting for 16.93 percent of total outstanding loans at that time. State-owned banks had 42.83 percent of their total loans classified as non-performing, while private banks had 15.60 percent classified as non-performing as of December 2024.
The governor attributed the rise in NPLs to a lack of transparency in reporting bad loans and changes in loan classification policies. Previously, loans were classified as overdue after 270 days, but this timeframe was reduced to 180 days. Starting from April 2025, loans will be classified as non-performing within just 90 days, which is expected to further increase NPLs.
Dr. Mansur clarified that the central bank is now providing actual data, which has led to an apparent increase in NPLs. The government previously reported NPLs at 9 percent, which he claimed was not accurate. To address this issue, a new law titled ‘Bank Resolution Act’ is being formulated. This law will empower Bangladesh Bank to implement corrective measures such as mergers, acquisitions, liquidation, re-capitalisation, and consolidation of crisis-ridden banks.
Under the new act, policy decisions regarding merger, acquisition, liquidation, or recapitalisation of any bank will be possible, as stated by Dr. Mansur.