This means nearly one-fourth of the rescheduled loans have turned bad again.

“Actually, this is just an eyewash to camouflage the true defaulted loan scenario,” Mansur, also chairman of Brac Bank, told The Daily Star yesterday.

Wholesale rescheduling indicates that banks are trying to clean up their financial balance sheets artificially in a bid to show profits, he pointed out.

“But this is not a solution for improving banks’ financial health,” said Mansur, also a former official of the International Monetary Fund.

He further said lenders must speed up the recovery of their defaulted loans or else they will be in deep trouble.

In November last year, defaulted loans dropped to Tk 96,986 crore from Tk 116,288 crore two months earlier, as defaulters jumped at the BB’s offer to reschedule loans on relaxed conditions.

The volume of NPL could have increased significantly if banks did not regularise the defaulted loans in a relaxed manner, Mansur said.