Bangladesh, July 28 -- Bangladesh's banking sector is facing growing financial stability concerns as full-fledged Islamic banks and fourth-generation private commercial banks grapple with soaring default loans and mounting liquidity pressures, according to the latest Banking Sector Update released by Bangladesh Bank.

The report shows that both categories have emerged as the weakest segments of the banking industry, burdened by exceptionally high non-performing loans (NPLs), aggressive lending and deteriorating liquidity positions.

The central bank warned that, without prompt corrective measures, these vulnerabilities could pose broader systemic risks to the country's financial sector and economic growth.

The NPL ratio of full-fledged ...