The pace of recovery of banks' nonperforming loans (NPL) was much lower than the rate at which their NPL increased last year -- an ominous development for the sector.
In 2018, banks recovered Tk 13,392 crore of NPLs, up 5.86 percent from a year earlier, while delinquent loans in the sector soared 26.38 percent to Tk 93,911 crore, according to data from the sector.
Given the trend, the latest government move to amend the existing loan rules to extend more facilities to defaulters will only exacerbate the situation, said Khondkar Ibrahim Khaled, former deputy governor of the central bank.
Last week, the government announced that defaulters would be allowed to reschedule their loans for 12 years after furnishing 2 percent down payment under a special package.
At present, defaulters can reschedule their loans for at most 3 years by providing 10 to 15 percent down payment.https://www.thedailystar.net/business/news/recovery-fails-keep-pace-default-loan-spike-1722655