STAR BUSINESS REPORT

The central bank yesterday issued a clarification saying that non-performing loans (NPLs) in the banking sector stood at 30.60 percent at the end of last year.

The Bangladesh Bank (BB) statement came after several media outlets reported that distressed loans in the banking sector ranged between 45 percent and 60 percent at the end of 2025. Those reports were based on the Financial Stability Report 2025 recently published by the BB.

The central bank said media outlets had made their “own calculations” in arriving at those higher figures.

It added that there is no universally accepted definition of distressed loans among international banking policy-making organisations.

According to the BB, loans that do not generate income or where borrowers fail to pay instalments are generally treated as distressed. However, it said rescheduled loans that remain unclassified should not be included in that category, as borrowers continue to make repayments under revised terms.

The central bank also said written-off loans should not be counted as distressed loans, as they are no longer part of a bank’s balance sheet under international best practice.

The BB said that, based on its definition, NPLs in the banking sector stood at 30.60 percent as of 2025.

It mentioned that including rescheduled loans, written-off loans and other categories alongside classified loans could create a misleading picture of the banking sector. Such reporting could send an incorrect message both at home and abroad.

It urged media outlets to report on the issue responsibly, with due regard to objectivity, sensitivity and national interest.