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Bangladesh now has the world’s highest rate of non-performing loans, with bad loans touching Rs 4.68 lakh crore, as previously hidden troubled loans come to light.
Street vendors sell and exchange bank notes of local currency in Dhaka, Bangladesh. (IMAGE: REUTERS)
Bangladesh has moved to the top of the global ranking for the share of bad loans in the banking sector, with around 33 out of every 100 taka lent by banks now classified as a non-performing loan.
According to Prothom Alo, irregular and previously hidden or anonymous loans have increasingly been recognised as non-performing, allowing the true picture of Bangladesh’s banking sector to emerge.
Chad, Equatorial Guinea, Algeria and Ghana follow Bangladesh. Ukraine, which previously had the world’s highest rate of non-performing loans, has now moved out of the top five after its loan situation began improving from 2024. Loan recovery, restructuring and an increase in comparatively better-quality new lending helped bring down the ratio of non-performing loans to total loans.
According to Ukraine’s central bank, total lending in the country’s banking sector increased by 133.7 billion hryvnia, or 10.3 per cent, in the first six months of 2025. During the same period, the non-performing loan ratio fell to 27 per cent. One US dollar was equivalent to 44.61 hryvnia at the time.
Bangladesh: Non-Performing Loans At 32.92%
According to Bangladesh Bank, non-performing loans in the country’s banking sector stood at around ₹4.68 lakh crore at the end of June 2026. This was 32.78 per cent of the total loans disbursed by banks.
At the end of March 2026, non-performing loans stood at around ₹4.54 lakh crore. The figure increased by around ₹13,800 crore in just three months. Earlier, in September 2025, non-performing loans had reached a record ₹4.97 lakh crore.
People familiar with the developments told the Bangladesh daily that a large part of these bad loans did not suddenly emerge.
“During the previous Awami League government, many troubled loans had been shown as regular for years through loan rescheduling, special concessions and accounting changes,” people from the Bangladeshi banking sector told the newspaper.
“Following the political change, reviews of banks’ assets and audits by domestic and international institutions brought to light the actual extent of irregularities, fraud and anonymous loans. As a result, a huge volume of loans that had previously remained hidden have now been classified as non-performing.”
How Bangladesh Rose To The Top
The five banks that were merged are in the worst condition. More than 80 per cent of the loans disbursed by these banks are non-performing. Several other state-owned and private banks also have more than half of their loans classified as non-performing.
Fake and anonymous loans extended under political influence, weak supervision, a slowdown in business activity and the energy crisis have also contributed to the rise in bad loans.
Ukraine has written off old non-performing loans that were fully provisioned for, recovered and restructured loans, and increased the volume of better-quality new lending. As a result, both the amount and ratio of non-performing loans have fallen.
Bangladesh has moved in the opposite direction.
In June 2024, officially recognised non-performing loans in Bangladesh’s banking sector stood at around ₹1.63 lakh crore. Within two years, the figure had crossed ₹4.6 lakh crore.
However, this does not mean that the entire increase represents loans that newly turned bad during this period. Instead, a huge volume of troubled loans that had been kept out of sight for years through rescheduling, special concessions and accounting practices are now being recognised as non-performing.
About the Author
Shankhyaneel Sarkar is a chief sub editor at News18. He covers international affairs, where he focuses on breaking news to in-depth analyses. He has over seven years of experience during which he has …Read More
Dhaka, Bangladesh
September 03, 2026, 5:40 PM IST
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