Twelve banks faced a massive provision shortfall of Tk聽1,09,151 crore at the end of December, with state-owned Janata Bank alone accounting for Tk聽27,860 crore, according to Bangladesh Bank data.
The crisis deepened significantly compared with June 2024, when 10 banks 鈥� four state-owned and six private commercial 鈥� had a combined provision shortfall of Tk聽31,549 crore.
The growing deficit reflects the banks鈥� deteriorating ability to maintain mandatory provisions against soaring defaulted loans.
Janata Bank, one of the worst-hit state-owned lenders, saw its provision shortfall surge to Tk聽27,860 crore in December from zero in June.
This was triggered by a staggering jump in its defaulted loans, which skyrocketed to Tk 67,147 crore 鈥� 72 per cent of its total loan portfolio.
A major factor behind Janata Bank鈥檚 financial distress is its largest defaulter, Beximco Group, which owes Tk聽25,000 crore. The bulk of this amount turned into bad debt suddenly after the fall of the Awami League-led government.
Bank officials, in collusion with the group, had previously hide loan data and showed them regular loans.
Other major defaulters include Anontex, S Alam Group, Crescent Group, and Thermex Group.
National Bank Limited, a private commercial bank, recorded the second-highest provision shortfall of Tk聽18,720 crore in December, up from Tk聽14,703 crore in June.
This shortfall was driven by a sharp rise in non-performing loans, which surged to Tk聽25,846 crore in December from Tk聽20,929 crore in June.
Overall, the total provision shortfall in the banking sector quadrupled in just six months, soaring to Tk聽1,06,130 crore in December, up from Tk聽55,378 crore in September and Tk聽24,810 crore in June.
Scam-hit Islami Bank Bangladesh and Social Islami Bank, both previously controlled by S Alam Group, faced the third- and fourth-highest provision shortfalls, amounting to Tk聽13,153 crore and Tk聽10,603 crore, respectively. The neither had any provision deficit in June 2024.
Sonali Bank suffered the fifth highest provision shortfall of Tk聽9,030 crore followed by Agrani Bank鈥檚 Tk聽8,889 crore, IFIC Bank Tk聽7,886 crore, Rupali Bank Tk聽7,021 crore and Basic Bank Tk聽5,170 crore at the end of December.
Besides, Bangladesh Commerce Bank suffered Tk 533 crore, Standard Bank Tk 307 crore and Dhaka Bank Tk 176 crore in provision shortfall at the end of December 2024.
Experts said that mounting non-performing loans (NPLs) have made it nearly impossible for many banks to meet these requirements. Provisions are typically drawn from bank profits, but widespread loan defaults have eroded earnings, leaving banks unable to comply with regulatory mandates.
They said that the crisis is the result of years of unchecked loan irregularities, corruption, and regulatory failures. Politically driven lending and a lack of enforcement have created a financial black hole that now threatens the stability of the banking sector.
