Bangladesh’s banking sector faces mounting challenges as defaulted loans soared to 24.13 percent by March 2025, up from 20.20 percent in December 2024, according to Bangladesh Bank data. The total bad loans across 61 scheduled banks jumped to 4,20,334.94 crore Bangladeshi Taka, signaling deepening financial distress. Net classified loans also rose to 15 percent, exposing inadequate reserves. Provision shortfalls widened to 1,70,655.32 crore Taka, with coverage ratios dropping to 37.97 percent. State-owned banks remain the worst hit, with nearly 46 percent of their loans in default. Experts warn the trend could threaten credit flow and broader economic stability.