Abstract
The aims of this study is to be analyzed the comparative position of all the fours banking categories on non-performing loans in Bangladesh and also investigate what are the different causes of non-performing loans in banking sectors of Bangladesh. This study will cover based on secondary data, which has been collected from the annual reports of the Bangladesh Bank during the 2006-2017 for 12 years and total NPL, NPL to Total Loans ratio and Trends of net NPL to total loans ratio are taken as variables of the study. The data are analyzed by using descriptive Statistics, ANOVA Test and the Test of Homogeneity of Variances. In this paper it is found that there is significant difference at the performances of four categories of banks on the Non-performing loans and there is no Homogeneity of Variances of total NPL, NPL to Total Loans ratio and Trends of net NPL to total loans ratio among all the banking categories. The SCBs and DFIs have continues maintain the high level of NPL and NPLs ratio to total loans then PCBs and FCBs and the NPLs recovery record during the study period has witnessed some sign or signal for improvement, due to number of step are taken with regard to internal restructuring for strengthen the loan recovery mechanism and initiative taken for written off measurement in recent time for all the banking categories. The suggestions and recommendation have been given for improve the present situation of non-performing loans in the banking sectors in Bangladesh.
Highlights
The performances of four categories of banks which are SCBs, DFIs, PCBs and FCBs on the Nonperforming loans are not same/equals and there is no Homogeneity of Variances and all of the banking categories are failed to meet the international standards 2 percent of Non-performing Loans (NPLs) ratio to total loans, the average growth rate of NPLs is very high among the banking categories during the study periods
The SCBs and DFIs have continues maintain the high level of NPL and NPLs ratio to total loans PCBs and FCBs because of SCBs and DFIs are reluctant to write off of accumulated historical bad loans for the poor quality of collateral which are underlying to loans
That there is needed to improve operational efficiency or operational weakness and week governance of corporation alongside this needed to monitor closely foe enhancing sound banking operations after than the NPLs recovery record during the study period has witnessed some sign or signal for improvement, due to number of step are taken with regard to internal restructuring for strengthen the loan recovery mechanism and initiative taken for written off measurement in recent time for all the banking categories that is why the researchers are expected that the overall performance on NPLs will be improved greatly in near future by the ways of taken appropriate action in the lagged areas
Summary
The deepest Problems of the banking industry in Bangladesh are a large portion of loans are becoming frequently non-performing. The quality of asset of a bank heavily depends on NPLs because loans are a major part of the asset of banks and its impact on profitability and economic development of a country so that all the banking categories in Bangladesh should improve the performance on NPLs to improve the current situation for Banks themselves and for the country
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