The defaulted loan figure is set to double as the Bangladesh Bank is set to tighten the classification rules for all types of loans by March next year to meet the International Monetary Fund’s loan conditions.

Default loans in the banking system surpassed Tk 200,000 crore for the first time, underlining the fragile condition of the sector that fell prey to rampant scams and irregularities under the tenure of the Awami League government over the past 16 years.

The combined bad loans of the banks surged 27 percent year-on-year to Tk 62,913 crore at the end of last year. Two years prior, total bad loans of the four state banks stood at just over Tk 38,200 crore, according to financial statements.

The central bank said in quarterly review on money and exchange rate

More than Tk 92,000 crore have been siphoned out of the banking sector through 24 major loan scams since 2008, according to the Centre for Policy Dialogue (CPD).

The growth of bad loans is mainly due to the business-politics nexus, lack of corporate governance, and weak judicial system

HSBC Global Research says

The news of Bangladesh occupying the second-highest position in South Asia in terms of a bad loan ratio is no surprise.