BB clarifies NPL figures, rejects misleading 'distressed loan' calculations

Bangladesh Bank (BB) clarified on Wednesday its position on the banking sector's non-performing loans (NPLs), rejecting media reports that claimed the country's distressed loan ratio ranged between 45 percent and 60 percent.

In a press release, the central bank said such figures were based on technically flawed calculations and did not reflect the actual condition of the banking sector as presented in its annual Financial Stability Report (FSR) 2025, reports BSS.

According to the report, the official NPL ratio of the country's banking sector stood at 10.10 per cent as of December 31, 2025. Bangladesh Bank said this audited and finalized figure remains the authoritative measure of the sector's non-performing assets. The central bank noted that some media reports had calculated so-called distressed loans by adding together classified or non-performing loans, rescheduled loans and written-off loans. It described this method as an inappropriate and technically incorrect approach that led to inflated figures.

Bangladesh Bank further stated that there is no internationally recognized or standardized definition of "distressed loans" among global regulatory and policy-making institutions.

While the term is often used to describe loans that are not generating income or are not being serviced regularly, the aggregate calculation used in the reports does not conform to accepted regulatory or accounting practices.