B Mirror Desk : The record for the highest number of defaulted loans in the nation’s history was established in the last quarter of December. Presently, the total amount of defaulted loans in the banking sector has risen to Tk 3,45,765 crore, which constitutes approximately 20.2 percent of all loans issued. Concurrently, the banking sector’s loan balance stands at Tk 1,71,402 crore.

Furthermore, the capital shortfall affecting one-third of the banks has escalated due to the significant rise in defaulted loans. Over a span of three months, the capital deficit for 20 banks has surged to Tk 1,71,789 crore.

This situation has been highlighted in the December quarter report released by Bangladesh Bank. As per the central bank’s findings, the capital deficit for banks in the September quarter of 2024 was recorded at Tk 53,253 crore. By the December quarter, the total deficit for these 20 banks had increased to Tk 1,18,534 crore, with the capital deficit for 10 public and private banks reaching Tk 39,655 crore by the end of December 2023.

The combined capital and risk-weighted assets ratio (CRAR) for the banking sector dropped to 3.08 percent at the conclusion of the last December quarter, down from 6.86 percent at the end of the previous September quarter. In accordance with the internationally recognized Basel-3 standards, financial institutions are mandated to uphold a minimum capital level. Under Basel-3 regulations, every bank in Bangladesh must maintain a capital reserve of either 10 percent of their risk-weighted assets or Tk 5 billion, whichever is greater.

Non-compliance with this requirement results in a capital deficit status for the bank. This capital is derived from the initial investments and profits of the entrepreneurs. Banks experiencing a capital deficit are prohibited from distributing dividends to their shareholders.