NBFIs' default loans climb to 8pc in June
Tuesday, 16 September 2008
Siddique Islam
The rate of overall default loans in the non-banking financial sector climbed to 8.0 per cent in June this year from 6.0 per cent registered three months earlier, officials said.
The non-performing loans (NPLs) have increased by 2.0 percentage points mainly due to poor recovery by some non-banking financial institutions (NBFIs) during the period.
The central bank has already instructed at least seven NBFIs out of 29 for taking necessary steps to reduce the amount of classified loans immediately.
The Bangladesh Bank (BB) took the move against the backdrop of a rising trend of the NPLs that are now ranging between 10 per cent and 26 per cent of the total outstanding loans of the NBFIs.
The total classified loans of all NBFIs stood at Tk 7.90 billion against their total outstanding loans of Tk 96.67 billion in June this year, according to the central bank statistics.
"We expect that the classified loans would come down to 5.0 - 6.0 per cent by the end of December this year," a BB senior official told the FE Monday.
He also said the amount of classified loans shoots up if one or two big parties become defaulters.
Currently, 29 NBFIs are operating their businesses across the country.
"The overall economic situation is mainly responsible for the increase in overall default loans in the sector," Managing Director of the Industrial and Infrastructure Development Finance Company Limited (IIDFC) Asaduzzaman Khan told the FE.
Mr. Khan, the senior most executive director of the central bank prior to his new assignment, expected that the classified loans in the sector would come down to the previous level by the end of this year.
On the other hand, the overall investment grew by 5.26 per cent to Tk 4.84 billion in the last fiscal from that of the previous fiscal.
A total of Tk 96.81 billion was invested by the NBFIs as on June 30, 2008 against Tk 91.97 billion in the same period of the previous fiscal, the BB's data showed.
The rate of overall default loans in the non-banking financial sector climbed to 8.0 per cent in June this year from 6.0 per cent registered three months earlier, officials said.
The non-performing loans (NPLs) have increased by 2.0 percentage points mainly due to poor recovery by some non-banking financial institutions (NBFIs) during the period.
The central bank has already instructed at least seven NBFIs out of 29 for taking necessary steps to reduce the amount of classified loans immediately.
The Bangladesh Bank (BB) took the move against the backdrop of a rising trend of the NPLs that are now ranging between 10 per cent and 26 per cent of the total outstanding loans of the NBFIs.
The total classified loans of all NBFIs stood at Tk 7.90 billion against their total outstanding loans of Tk 96.67 billion in June this year, according to the central bank statistics.
"We expect that the classified loans would come down to 5.0 - 6.0 per cent by the end of December this year," a BB senior official told the FE Monday.
He also said the amount of classified loans shoots up if one or two big parties become defaulters.
Currently, 29 NBFIs are operating their businesses across the country.
"The overall economic situation is mainly responsible for the increase in overall default loans in the sector," Managing Director of the Industrial and Infrastructure Development Finance Company Limited (IIDFC) Asaduzzaman Khan told the FE.
Mr. Khan, the senior most executive director of the central bank prior to his new assignment, expected that the classified loans in the sector would come down to the previous level by the end of this year.
On the other hand, the overall investment grew by 5.26 per cent to Tk 4.84 billion in the last fiscal from that of the previous fiscal.
A total of Tk 96.81 billion was invested by the NBFIs as on June 30, 2008 against Tk 91.97 billion in the same period of the previous fiscal, the BB's data showed.