Non-Performing Loans Hit Record Tk 6.06 Lakh Crore Again
Bad bank loans are rising once more, just months after a brief improvement. Nearly one in three taka lent by banks is now unpaid.
In a Nutshell
- Bad loans (called non-performing loans, or NPLs) in Bangladesh's banks reached Tk 606,555 crore by the end of June 2026. That's about Tk 18,000 crore more than in March 2026.
- Out of every Tk 100 that banks lent out, nearly Tk 33 is now unpaid or bad. This is called the NPL ratio, and it rose from 32.26 per cent in March to 32.78 per cent in June.
- This is the second time bad loans have crossed Tk 6 lakh crore. The first time was in September 2025, when they hit an all-time high of Tk 6,44,015 crore.
- After that peak, Bangladesh Bank gave defaulters extra time to repay through a special facility (BRPD Circular No. 07/2025). This brought bad loans down to Tk 557,217 crore by December 2025, but many borrowers defaulted again anyway.
- Just this week, on September 1, 2026, the central bank gave an even bigger break to big defaulters. Those owing Tk 1,000 crore or more can now take up to 15 years to repay, instead of 10.
Context
Bad loans have been rising sharply since political changes in August 2024 uncovered many hidden loan problems, including loans given out to fake borrowers. Bangladesh Bank tried to fix this by giving defaulters extra time to repay, which worked briefly in December 2025. But the relief didn't last, and bad loans are climbing again.
Why It Matters
When banks have this much bad debt, they have less money to lend to businesses and factories, which can slow down the whole economy. Around 300 large borrowers alone got nearly Tk 1 lakh crore worth of extra repayment time under the special facility, showing that most of this relief is going to big companies, not small businesses.
Private banks are holding about Tk 4.16 lakh crore in bad loans, but government-run banks are in worse shape proportionally, with nearly half of their loans (46 percent) classified as bad. Every time the central bank gives more time to repay, it delays the problem instead of solving it, and banks remain financially weaker in the meantime.
What we think
Giving 300 large borrowers nearly Tk 1 lakh crore in extended time, while small businesses get far less support, raises questions about who these relief measures truly serve.
Longer repayment windows don't erase debt; they just delay recognition of losses while banks stay financially strained, with reduced central bank oversight on these large cases.