Default loans in Bangladesh’s banking sector increased by Tk3,753 crore in March, despite extensive policy support and loan rescheduling by candidates prior to the national election.
According to the latest report from Bangladesh Bank, the total volume of default loans stood at Tk5,88,704 crore at the end of March, accounting for 32.26% of total disbursed loans.
The ratio of defaults rose by 1.66% over three months, up from the 30.6% recorded at the end of December.
The total amount of disbursed loans in the country reached Tk18,24,668 crore in March, an increase of Tk31,487 crore. Bangladesh Bank noted that while private sector credit growth hit an all-time low, the total loan volume increased primarily due to the addition of interest.
Central bank spokesperson Arief Hossain Khan explained that the rise occurred because loan recovery did not meet expected levels, while interest on existing defaults continued to accumulate.
He further noted that those who rescheduled their loans under policy support are currently benefiting from a two-year grace period, which has stalled immediate recovery.
“The pace and volume of recovery will increase once the two-year period expires,” Khan said, adding that candidates – who rescheduled loans before the 13th Parliamentary Election held on 12 February – had provided only a 2% down payment.
Data shows that default loans reached an all-time high in September 2025, peaking at Tk6.44 lakh crore, or nearly 36% of total loans. Although special policy measures helped reduce the figure to Tk5,57,216 crore by last December, the amount began to climb again within just three months.
