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Nonperforming Loans in the Banking Sector of Bangladesh: Realities and Challenges Bangladesh Institute of Bank Management (BIBM) Bishnu Kumar ADHIKARY abstraction This paper discusses the magnitude of Nonperforming Loans (NPLs) in the banking sector of Bangladesh since the adoption of prudential norms in the impartword classi?cation and provisioning system in 1990. The paper reveals that the front end of an alarming amount of NPLs both in the Nationalized Commercial Banks (NCBs) and in the Development Financial Institutions (DFIs), along with maintenance of inadequate loan loss provisions, diminishes the overall credit quality of Bangladesh. Poor enforcement of laws relating to colony of NPLs, followed by insuf?cient debt recovery measures on the part of the banks, has also exacerbate the ?nancial malaise, although a decrease in NPLs is noticed since the year 2000. The paper suggests that the prevention of the ?ow problem of bad loans accompanied by otherwise resolution measures might help to sort out the nonperforming loan mess in Bangladesh. Keywords: Loan classification system, nonperforming loans, commercial banks, enforcement post of loans, loan recovery measures, Bangladesh.

Introduction Nonperforming loans (NPLs) refer to those financial assets from which banks no longer receive interest and/or installment payments as scheduled. They are known as non-performing because the loan ceases to perform or generate income for the bank. Choudhury et al. (2002: 21-54) state that the nonperforming loan is not a uniclass yet rather a multiclass concept, which means that NPLs can be categorize into different varieties usually based on the length of neglectful of the said loans. NPLs are viewed as a typical by- result of financial crisis: they are not a main product of the lending function but rather an accidental circumstance of the lending process, one that has enormous potential to deepen the bad weather and duration of ?nancial crisis and to complicate macro... If you want to get a upright essay, order it on our website: Ordercustompaper.com

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