The volume of defaulted loans in the banking system rose by 14.78 percent, increasing to Tk 20,098 crore in December 2006 from Tk 17,509 crore in December 2005. The total increase in defaulted loans is Tk 2,589 crore. The amount of defaulted loans in national commercial banks (NCBs) increased 15 percent or Tk 1,479 crore while private commercial banks (PCBs) saw an increase of 23 percent or Tk 822 crore.

Defaulted loans in development financial institutions (DFIs) rose by Tk 308 crore or 8 percent. Only foreign commercial banks (FCBs) managed to reduce loan default, bringing it down by 19 percent or Tk 20 crore. Out of the four NCBs Sonali, Janata and Rupali saw rise in loan defaults, while Agrani Bank managed to curb it. The government plans to sell its stake in Rupali Bank the loan portfolio of which had been marked as classified in accordance with international standards increasing the amount of its defaulted loans from Tk 750 crore to Tk 1,135 crore within a year.

Among the PCBs, with the exception of the problem ridden Oriental Bank and Bangladesh Commerce Bank Ltd (BCBL), defaulted loans in all the others remained below ten percent of their outstanding loans. Defaulted loans in most of the 30 PCBs stand between .15 percent and 4 percent of their outstanding loans.

Out of the total amount of Tk 1,52,857 crore in outstanding loans in the banking system, the amount of classified loans was Tk 20,098 crore or 13.15 percent on December 31, 2006 compared to 13.55 percent or Tk 17,509 crore on December 31, 2005. Classified loans in NCBs amounted to Tk 11,503 crore or 22.94 percent of their outstanding loans in December 2006 which had been Tk 10,024 crore or 21.35 percent in December 2005.