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Nonperforming Loans in the Banking Sector of Bangladesh: Realities and Challenges

Bishnu Kumar ADHIKARY

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This paper discusses the magnitude of Nonperforming Loans ("NPLs") in the banking sector of Bangladesh since the adoption of prudential norms in the loan classification and provisioning system in 1990. The paper reveals that the presence of an alarming amount of NPLs both in the Nationalized Commercial Banks (NCBs) and in the Development Financial Institutions (DFIs), along with maintenance of inadequate loan loss provisions, diminishes the overall credit quality of Bangladesh. Poor enforcement
more » ... of laws relating to settlement of NPLs, followed by insufficient debt recovery measures on the part of the banks, has also aggravated the financial malaise, although a decrease in NPLs is noticed since the year 2000. The paper suggests that the prevention of the 'flow problem of bad loans' accompanied by other resolution measures might help to sort out the nonperforming loan mess in Bangladesh.
doi:10.34382/00011677 fatcat:cxg7y6ryanhuhf5fprcbegrvpi
lang:ja
Citation

Bishnu Kumar ADHIKARY. "Nonperforming Loans in the Banking Sector of Bangladesh: Realities and Challenges." 75-95