Bangladesh Bank flags high non-performing loans as major financial risk

In a recently published quarterly review report, Bangladesh Bank has highlighted the alarming levels of non-performing loans (NPLs) as a significant threat to the country‍‍`s financial sector. The central bank underscored that the prevalence of high NPLs poses a substantial risk to the sector‍‍`s advancement.

According to Bangladesh Bank‍‍`s review report on currency and exchange rates, state-owned banks have struggled to maintain the minimum capital adequacy ratio for a decade, while specialized banks are facing capital shortfalls.

Furthermore, Bangladesh Bank has issued a challenge to Islamic banks, urging them to avail loans from the central bank to alleviate special liquidity support, currency devaluation, foreign account deficits, and liquidity shortfalls.

The quarterly review report warns of potential long-term repercussions on overall economic activity if these issues remain unresolved. It emphasizes the urgency of addressing these challenges to safeguard the country‍‍`s economic stability and financial health.