Dhaka, Oct. 20 -- The Bangladesh banking sector is experiencing its most severe crisis in decades, marked by a debilitating capital shortfall of approximately $15.5 billion and the unfortunate distinction of having the highest rate of non-performing loans (NPLs) in Asia. This alarming situation has been starkly revealed by the sector's ongoing transition to the BASEL III regulatory framework.

In a pivotal move to align with global standards, Bangladesh Bank has revised its loan classification criteria, reducing the default period for labelling a loan as non-performing from six months to three, effective from April 2025. While this regulatory tightening is a necessary step toward greater transparency and financial discipline, it has also ...