Classified loans in the banking sector reached Tk 5,88,704 crore in March 2026, accounting for 32.26 per cent of the total outstanding loans of Tk 18,24,668 crore. Just one year earlier, the ratio stood at 24.13 per cent.
The figures are based on the statement of 61 scheduled banks released by Bangladesh Bank (BB) on Tuesday.
According to central bank statistics, after adjusting for provisions and interest, net classified loans stood at 15 per cent of total loans, up from 13.93 per cent in December 2025.
The state-owned commercial banks remain the biggest concern, with the highest non-performing loan (NPL) ratio. Their gross classified loans stand at 45.85 per cent. Private banks are not far behind at 30.11 per cent, while foreign banks continue to perform well with only 4.82 per cent classified loans. Specialized banks reported a classified loan ratio of 40.72 per cent.
The provision shortfall is also alarming. Banks are required to maintain Tk 4,61,714 crore in provisions against bad loans, but they have set aside only Tk 2,56,049 crore, leaving a shortfall of Tk 2,05,665 crore.
Provision coverage ratio dropped to 55.46 per cent from 56.60 per cent three months earlier.
In the mean time the special mention accounts-early warning loans-jumped to Tk 1,32,120 crore from Tk 1,03,374 crore.
Bad and loss loans within NPLs now make up 93.69 per cent of all classified loans. That means most troubled loans have little chance of recovery.
Total outstanding loans grew only modestly. It increased by Tk 3,753 crore to Tk 18.25 lakh crore. But classified loans grew nearly ten times faster, adding Tk 31,488 crore in just three months.
Year-on-year, the picture is even worse. Between March 2025 and March 2026, gross classified loans rose by 8.13 percentage points. That is a massive jump by any standard.
Defaulted loans increased by 1 percentage point to 30.92 per cent in the last quarter alone from 29.92 per cent in December quarter last year. In March quarter of the last year, the defaulted loan ratio was 20.53 per cent that in a full year it rose by over 9 percentage points.
State banks saw their provision shortfall widen to Tk 74,472 crore. Private banks face a shortfall of Tk 1,31,310 crore. Only foreign banks have a small provision surplus.
The rising trend threatens financial stability. Banks have less buffer to absorb future losses. Lending capacity gets squeezed.
When contacted a former banker said recovery efforts remain weak. Loan classification rules are strict on paper, but enforcement lags. Many large defaulters continue to operate without consequence.
He referring the central bank data said the problem is not new. The pace of deterioration has accelerated. In just one quarter, NPLs increased by nearly Tk 28,000 crore.
For comparison, total new lending in that same period was only Tk 3,753 crore. That means new bad loans are being created much faster than fresh credit is being extended.
Experts say urgent corrective action is needed. Without it, the NPL ratio could cross 35 per cent by year end. That would put several banks at risk of breaching regulatory capital requirements.
The central bank is expected to push for higher provisioning and stricter recovery drives. But given the current trajectory, bringing NPLs under control will remain a major challenge for the rest of the year.
