Banks' classified loans to the country's industrial sector swelled by over 24 per cent or Tk 48.17 billion to Tk 245.63 billion in the first half (H1) of the current fiscal, compared to that of the corresponding period of the previous fiscal.
Officials said such climb in the amount of dud loans was taking place despite close monitoring by the central bank to stem the tide.
The non-performing loans (NPLs) in the sector during the July-December period of the financial year (FY) 2016-17 rose sharply from Tk 197.47 billion in the same period of last fiscal, according to the central bank's latest statistics.
"Higher NPLs with the state-owned commercial banks (SoCBs) have pushed up the overall classified loans in the financial sector during the period under review," a senior official of the Bangladesh Bank (BB) told the FE Monday while explaining the latest trend in such loans.
During the period, the total amount of NPLs with the SoCBs soared more than 41 per cent to Tk 86.51 billion from Tk 61.17 billion in the same period of the FY16.
"We've already expedited our monitoring and supervision to reduce the amount of NPLs through increasing the recovery of such loans," the BB official noted.
However, the total amount of classified loans with the private commercial banks (PCBs) increased by nearly 34 per cent to Tk 89.12 billion during the period from Tk 66.61 billion in the H1 of the FY16.
The volume of NPLs with the foreign commercial banks (FCBs) dropped by 10.21 per cent to Tk 6.37 billion in the first six months of this year from Tk 7.09 billion in the H1 of the last fiscal.
The classified loans with specialised banks also fell by 1.44 per cent to Tk 43.02 billion in the July-December period from Tk 43.65 billion six months before.
On the other hand, the volume of NPLs with non-banking financial institutions (NBFIs) increased by 8.81 per cent to Tk 20.61 billion in the H1 of the FY17 from Tk 18.94 billion in the first six months of the FY16.
Meanwhile, disbursement of the overall industrial credits, covering working capital and term loans, increased by 16.59 per cent to Tk 1446.07 billion during the July-December period of the FY17 from Tk 1240.26 billion in the matching period.
The estimate includes disbursement of fresh credits, the rescheduling of term loans and fund release for balancing, modernisation, rehabilitation and expansion (BMRE) of industrial units.
Talking to the FE, another BB official said higher capital-machinery imports pushed up the disbursement of overall industrial loans during the period under review.
The import of capital machinery or industrial equipment used for production jumped by 58.55 per cent to $3.51 billion during this July-February period against $2.21billion of the same period of last fiscal.
He also said the existing upward trend in import of capital machinery may continue in the coming months for implementation of different ongoing infrastructure-development projects across the country.
Currently, the government is implementing nine projects under a Fast-Track Project Monitoring Committee, headed by Prime Minister Sheikh Hasina.
Senior bankers, however, said the power, telecommunications, pharmaceutical, textiles, garment and transportation sectors had received the lion's share of such credits.
"The flow of industrial credit may increase further in the coming months if the implementation of different ongoing infrastructure-development projects continues," a senior official of a leading PCB explained.
He also said the upward trend in the disbursement of industrial loans may continue in the coming months as the BB is encouraging the banks and NBFIs to expedite their credit flow to the productive sectors.
The recovery of the industrial loans increased by nearly 42 per cent to Tk 1210.89 billion during the H1 of the FY17 from Tk 853.61 billion in the same period of the last fiscal.
Total outstanding loans in the industrial sector increased by 17.31 per cent to Tk 3225.88 billion during the period under review from Tk 2749.98 billion in the H1 of FY16, the BB data showed.
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