Provision Shortfall Worsens in Bangladesh’s Banking Sector

Bangladesh’s banking sector continues to face a deepening crisis, largely driven by a sharp rise in non-performing loans (NPLs). As a result, the provision shortfall—funds banks must set aside to cover potential loan losses—has grown alarmingly. Regulations require banks to keep 100% provisioning against bad loans, but due to declining profits and increasing NPLs, banks are failing to meet this requirement.