The credit- or advance-deposit ratio in the banking sector continued to decline in February this year due to a dull business environment, said Bangladesh Bank officials.
According to the latest BB data, the ADR in the banking sector dropped to 70.35 per cent as of February 20, 2014 compared with that of 76.20 per cent as of February 14, 2013.
The ADR was 76.59 per cent as of December 31, 2012 and 80.33 per cent as of June 7, 2012.
A BB official told New Age that the businesspeople had adopted a ‘wait and see’ approach to expansion of their business by getting credit from banks due to the political unrest in the run up to the January 5 national polls that hit the ADR in the banking sector.
Uncertainty still persists in the business sector, he said.
He said, ‘We earlier hoped that the country’s business situation would get tempo in the second half of fiscal year 2013-14. But, the business sector is yet to get the momentum due to lack of confidence.’
For this reason, the ADR, one of the most important business indicators for the banks, has been hovering at the range of 70 per cent since December, 2013.
The BB data showed that the ADR declined in almost every month since the second half of the financial year 2012-13, he said.
A significant number of banks faced losses in the concluded year and they will suffer same situation if they see dull ADR also in the months to come, the BB official said.
In 2013, the ADR in the banking sector was 76.95 per cent as of January 10, 76.28 per cent as of February 7, 75.28 per cent as of March 14, 75.26 per cent as of April 25, 74.90 per cent as of May 2, 74.01 per cent as of June 13, 73.35 per cent as of July 11, 73.34 per cent as of August 1, 71.65 per cent as of September 26, 71.85 per cent as of October 21 and 71.91 per cent as of November 14. The ADR was 70.84 per cent in January 30, 2014.
As per BB rules, the conventional commercial banks are not allowed to invest more than 85 per cent of their deposits while Islamic banks and Islamic wings of the conventional commercial banks can invest up to 90 per cent of their deposits.
A number of banks had crossed the ADR limit in 2011 and 2012, violating the BB rules but the situation changed totally last year as the credit demand from the private sector continued to decrease, the BB official said.
The BB data showed that the ADR in 23 out of 56 banks declined below 70 per cent as of as of February 20 of this year.
The 23 banks are Agrani Bank (56.12 per cent), Bangladesh Commerce Bank (66.43 per cent), Citibank NA (34.09 per cent), Commercial Bank of Ceylon (55.37 per cent), Dutch-Bangla Bank (67.89 per cent), Farmers Bank (23.46 per cent), HSBC (56.21 per cent), Jamuna Bank (63.97 per cent), Janata Bank (61.18 per cent), Madhumati Bank (15 per cent), Meghna Bank (65.65 per cent), Midland Bank (64.02 per cent), Mutual Trust Bank (68.44 per cent), NRB Bank (24.10 per cent), Prime Bank (67.47 per cent), Pubali Bank (67.34 per cent), Rupali Bank (59.82 per cent), Sonali Bank (50.85 per cent), South Bangla Agriculture and Commerce Bank (65.36 per cent), StanChart (61.55 per cent), State Bank of India (51.89 per cent), Uttara Bank (56.17 per cent) and Woori Bank (58.43 per cent).