The Bangladesh Bank fails to rein in the surge of default bank loans as the total amount of default loans rose to Tk 734.09 billion at the end of March this year.
The amount of default loans constitutes 10.53 per cent of the total loans in the country's banking sector.
According to the central bank, the default loans have increased by Tk 140 billion till March 2017 as the total default of the country's banks was Tk 594.11 billion in March past year.
At present, the total amount of default loans stands at Tk 1.18 trillion.
People involved in the banking sector said the volume of default loans has spiralled because the government banks disburse loans on political consideration while privately-owned bank directors sanction loans among themselves.
Professor of economics at Chittagong University and former director general of the Bangladesh Institute of Bank Management (BIBM), Moinul Islam, told Prothom Alo that the defaulters are not being punished at the financial loan and bankruptcy courts. "This encourages people to be defaulters."
He also said that a special tribunal to bring the defaulters to the book is a matter of time. "The surge of default loans can be reduced once the big shots are sent to jail and their property seized."
According to the Bangladesh Bank, out of Tk 734.09 billion default loans, Sonali Bank, Agrani Bank, Rupali Bank, BASIC Bank and Bangladesh Development Bank maintain Tk 350.16 billion.
The 40 private banks have Tk 297.27 billion default loans while nine foreign banks have Tk 22.82 billion and the specialised banks have Tk 56.84 billion.
Former chairman of the Association of Bank's Bangladesh (ABB) and Meghna Bank's managing director, Mohammad Nurul Amin, said the amount of default loans is worrying. "All of us should be aware of this."
*This piece, originally published in Prothom Alo Bangla edition, has been rewritten in English by Toriqul Islam.