Banks rescheduled a record amount of defaulted loans last year as part of their efforts to contain bad debt and manage hefty profit, albeit artificially.

Last year, defaulted loans amounting to Tk 50,186 crore were regularised, the highest on record for a single year.

Of the sum, Tk 18,584 crore was regularised under the central bank’s relaxed policy announced on May 16 last year, allowing defaulters to reschedule their classified loans by making a down payment of only 2 percent of the outstanding amount instead of the existing 10-50 percent.

Banks recovered only Tk 479 crore as down payment from the loans rescheduled under the relaxed policy.

“The rescheduled loans will become defaulted again as banks regularised those on a wholesale basis without verifying the defaulters’ ability to repay,” said Ahsan H Mansur, executive director of the Policy Research Institute.

In fact, Tk 13,284 crore of the soured loans, regularised last year, have already become defaulted, show Bangladesh Bank data.