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Bank’s specific and macro economic factors behind the non-performing loan: a study on Bangladesh

Author Affiliations

  • 1Department of Economics and Banking, International Islamic University Chittagong (IIUC), Bangladesh

Int. Res. J. Social Sci., Volume 10, Issue (3), Pages 15-22, July,14 (2021)

Abstract

Non-performing loan, a bid signal for banking industry since it affects the principles of banking system. Loan becomes non-performing when it doesn’t have any periodic return and principal repayment. Bangladesh is faster economic country where banking industry is considered as second largest industry. The study aims to identify the facts both bank and macro precise behind then on performing (NPL) of the banks in Bangladesh. Data from 2012 to 2016 have been assessed for five selected banks of Bangladesh. The study found that NPL of the Sonali Bank is highest in position followed by other sample banks. The growth of the nonperforming loan is higher for the BASIC Bank and lowest growth is for Sonali Bank. Finally by using simple regression model the study founds that among 8 variables capital adequacy and asset management have undesirable significant effect on non-performing loan of sample banks where loan to deposit, profitability, inflation rate and unemployment rate have positive significant on non-performing loan.

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