Nonperforming Loan and Banking Sustainability: Bangladesh Perspective
- Lecturer, Department of Business Administration, Noakhali Science and Technology University, Bangladesh.
- Lecturer, Department of Business Administration, Noakhali Science and Technology University, Bangladesh.
- Senior Officer, One Bank Ltd., Bangladesh.
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This study has focused on investigating the causes of significant increase of nonperforming loans (NPLs) in the Banking industry of Bangladesh and its impact on sustainability of that industry. The study reveals that the country has been suffered from a large amount of nonperforming loans in the banking industry mainly due to fund diversion, political and board of directors’ interference, political instability, engagement of corrupted bankers, aggressive banking due to enhanced competition, falling in real estate business, weak monitoring and lack of coordination among related parties. It also found that giant defaulters and corrupted bankers have been escaped from jurisdiction under laws mainly by using political shelter that results in creating negative impression on good borrowers. Ensuring the application of credit sanctioning guidelines and strengthening debt recovery strategy, the nonperforming loans must be reduced otherwise in near future it will bring a disaster in banking industry that may threat its sustainability.
[Shafiqul Alam, Mahbubul Haq and Abdul Kader (2015); Nonperforming Loan and Banking Sustainability: Bangladesh Perspective Int. J. of Adv. Res. 3 (Aug). 1197-1210] (ISSN 2320-5407). www.journalijar.com
