Bangladesh now has the highest rate of default loans in Asia, according to the latest report by the Asian Development Bank (ADB).

The report reveals that in 2024, a staggering 20.2% of all disbursed loans in Bangladesh turned into defaults, amounting to $20.27 billion—an alarming 28% increase compared to the previous year. The ADB has labeled Bangladesh as having the “weakest banking system in Asia.”

Within just one year, the country’s default loan ratio jumped by 11.2 percentage points, while neighboring countries like India, Pakistan, and Sri Lanka managed to reduce their bad loan proportions. Nepal saw only a slight increase of 0.9%.

Highlighting India’s case, the report notes that large-scale banking reforms helped bring its non-performing loans down from 3.4% to 2.5%.

The ADB advised Bangladesh to urgently adopt strict legislation, strengthen financial markets, implement swift policy actions, modernize the judicial system, and ensure transparency and investor confidence. Only then, it warned, can the mounting loan default crisis be brought under control.