Default rate more than double official figure: BB chief

About 25%-30% of the country's bank loans have become classified, significantly more than the official figure of 12.5%, Bangladesh Bank Governor Ahsan H Mansur said Sunday, adding initiatives have been taken to bring down the default rate.

Most of the defaults have already occurred, and are only waiting to come under scanner in the next few months, the veteran economist told a meeting convened by Chief Adviser Prof Muhammad Yunus at the latter’s office in the capital.

Most of the default loans were taken after 2017 by a select group of Awami League members and cronies including Saiful Alam, and former land minister Saifuzzaman Chowdhury, Ahsan H Mansur told meeting participants.

Large amounts of loans were taken violating regulations, thanks to blessings from the Awami League autocratic regime, and siphoned abroad, the central bank chief said adding efforts are already underway to bring back the laundered money with support from international partners.

International agencies will start their work to comprehensively assess the state of 12 banks on 11 December. Later, eight more banks will be assessed to get a clear picture of the banking sector crisis, Ahsan H Mansur noted.

The fate of the terminally weak banks will be determined based on political consensus. However, authorities would ensure the depositors do not lose out in the process.

Printed money has already been supplied to the weak banks for retaining depositors’ confidence, Ahsan further informed the meeting.