Distressed assets may have reached Tk9.5 lakh crore by now: PRI
According to estimates by the Policy Research Institute (PRI), distressed assets in Bangladesh’s banking sector may now amount to Tk9.5 lakh crore, including restructured, rescheduled, and bad loans.
“Non-performing loans currently stand at Tk6.4 lakh crore (almost 36%) but total distressed assets may have reached around Tk9.5 lakh crore, indicating a low asset recovery potential,” said Dr Ashikur Rahman, principal economist at PRI, while presenting the keynote paper at a programme titled “Monthly Macroeconomic Insights (MMI)” at the PRI office in Banani, Dhaka, today (27 November).
He said high NPLs create risks of a credit crunch and weaken investment. “At least 16 banks have become incapable of issuing new loans, leading to lower investment, rising unemployment, and slower development — ultimately dragging down GDP growth.”
He highlighted four major consequences of failing to manage high NPLs in the banking sector, which is high interest rates, high inflation, low growth, and low investment.
PRI Chairman Dr Zaidi Sattar moderated the programme, which was attended by business leaders, economists, and other participants.
