Default loans in Bangladesh’s banking sector reached Tk2.85 lakh crore by the end of October, marking the highest in the country’s history.

The share of default loans also hit a 16-year high of nearly 17%.

The rise is attributed to regulatory violations during the Awami League’s 15-year rule that allowed politically connected individuals to take large loans.

Total disbursed loans stood at Tk16.82 lakh crore at the end of September, growing by 35% in three months.

Banking experts say the fall of the Awami League government in August has prompted banks to disclose real figures in their balance sheets. Stricter scrutiny and the withdrawal of concessional policies are expected to reveal more classified loans in the coming months.

The government and banks are under pressure to meet IMF conditions and reform loan policies, which could turn many regular loans irregular.

S Alam Group reportedly took Tk95,000 crore in loans with alleged political influence, much of which is now being classified. In 2008, default loans stood at Tk22,480 crore, rising by 1,168% during the Awami League’s tenure.