India, July 31 -- Bangladesh's banking sector stands precariously close to collapse, weighed down by defaulted loans exceeding Tk 5.3 lakh crore, nearly 30 per cent of total outstanding loans. Non-performing loans (NPLs) surged alarmingly from 16.9 per cent to over 20 per cent in just three months ending December 2024, far outstripping the global distress benchmark of 10 per cent. This stark rise lays bare years of entrenched corruption, persistent political interference, and regulatory inadequacies that have allowed toxic loans to accumulate unchecked.
The situation deteriorated markedly following the recent tightening of regulatory standards, which reduced the overdue period for classifying bad debts from six to three months, thus reveal...