Bangladesh Bank Governor Dr Atiur Rahman yesterday asked banks to reduce their investment portfolio within 25 per cent in the capital market by September 2016.
The governor also directed banks to submit new report regarding their investment in capital market. 
The governor made the direction while addressing a meeting with the chiefs of commercial banks at the BB conference in the city. Some 15 commercial banks have more than 25 per cent investment out of their total investment portfolio which is against the Banking Act 2013, said the governor.
Talking to the reporters, the central bank deputy governor SK Sur Chowdhury informed that the banks who have invested less than 25 per cent can invest more in the capital market.
Meanwhile, the governor also asked banks to cut interest rate for industrial loans and fix it at a reasonable level to boost investment aiming at spurring growth.
Rates of interest of some banks are still high and imposing of such interest rates especially on industrial sector is unexpected at a time when liquidity position is satisfactory.
The governor warned banks against any credit indiscipline and said the central bank will take strict measures against irregularities in loan management in future.
“Bangladesh Bank won’t hesitate to take strict measures against such irregularities,” he said, adding, “You must strengthen internal supervision, become more careful about loan disbursement, send genuine and quality loan proposals to board, face irrational pressure of board tactfully,”.
If necessary, he asked banks to take Bangladesh Bank’s help to create atmosphere of good governance for strengthening credit discipline and help the bank board realise this.
“You must take the responsibility . . . recurrence of irregularity will not be stopped if things go in this way that you will commit irregularities and BB will detect those,” Atiur said. He said some recent irregularities in banking sector got wide media coverage though Bangladesh Bank took strong measures against those banks concerned. 
Over the last five years, the central bank took a number of good steps for the overall development of the banking sector but those issues were not focused in the media, he added.
“It can’t be acceptable that one or two incident of irregularities would obliterate all our good deeds,” he said adding the central bank has strengthened its supervision activities and it will apply its highest power to uphold the confidence bestowed by the people upon it.
Atiur said there is surplus liquidity in the banking system as credit demand from internal sources has witnessed a fall slightly because importers are getting loans at lower interest and easy conditions from foreign sources. For maintaining profitability, banks need to explore new areas for investment, Atiur said.
But bankers must remain alert so that bank investment does not go to unproductive and highly risky sectors due to excessive liquidity pressure, he added.
He said some banks are purchasing credits from other banks and in many cases, those are default loans and purchasing of such credits is alarming. “We’ve kept these under our strict supervision . . . so you must remain alert about it,” he added.

The Muslim community usually spends on a lot of gifts, giveaways and clothes on the eve of the festival that triggers sales in the later part of Ramadan 

A saleswoman charging bills with a credit card at a city shop. The card vendors offer lucrative disounts on payments if Eid shoppers use the plastic money.

With Eid taking place next week, the sales outlets from clothing to electronics are in race to lure shoppers by offering heavy discounts.

Some banks and financial institutions, including City Bank, Eastern Bank Ltd and bKash, joined in this race too by offering cashless buying with discounts from their specified shops.

Besides, various clothing and jewelry outlets, electronic goods outlets also offer considerable discounts on top brand of products like Singer, Samsung and Nokia.

The Muslim community usually spends on a lot of gifts, giveaways and clothes on the eve of the festival that triggers sales in the later part of Ramadan.

More and more outlets and stores are putting up exclusive promotions to catch up with Eid shoppers, according to sellers.

Eid shoppers pick up a bargain in the capital's malls and stores as most outlets are offering discounts ranging from 10% to 100%, while others retained their old prices.

However, shop managers said the discounts did not cover their new collections.

Raihan, a 28-year-old store manager, said it was normal to have discounts in the run-up to the Eid.

“We started our sales a few days ago. It’s a long holiday season and we are trying to give people the chance to shop before Eid."

Mohammd Faruqe, a seller at a top brand outlet, said: “It's normal this time of the year to give discounts. We hope it will encourage people to shop more.”

Shoppers, on the other hand, thought some of the shops though advertising sales did not have any goods on discount.

Saima Farzana, 21 from Khilgaon came at a city shopping mall, said she saw some shops saying they were having a sale with discounts. "But in fact there was no sale."

"I went inside a shop that had a 60% discount sticker on the window to find one of the workers telling me the sale already ended weeks ago.”

She said: "I think it's a way to lure customers. It cannot be acceptable to the people."

Sadman Sakib, 23, student of a private university, said the shops those offer holiday discounts only applicable for old stocks only. “Most of the places having discount offers, don't give you discounts on their new collection of clothes,” he said.

"I know these shops offer discounts on last season's stock to get rid of it. But if you search hard enough you will find a good buy." 

‘Interest rate on loans should go down to compete in the market as foreign loan inflow increased significantly due to lower interest rates’

The central bank yesterday strictly warned off all bank chiefs from pandering to irregularities at their institutions or else they would be removed from their posts.

Without mentioning any name, Bangladesh Bank Governor Atiur Rahman said: “We have done exactly that to a certain managing director recently.”

BB in May fired BASIC Bank Managing Director Kazi Faqurul Islam for presiding over a period of serious irregularities at the state-run bank.

“The recurrence of irregularities can't be forestalled if you sit idle after breaking rules and wait for Bangladesh Bank to step in and detect the anomalies,” Rahman said at the bankers' committee at the BB headquarters, attended by the managing directors of all banks.

“All irregularities -- big or small -- must be mentioned in your audit report. Bangladesh Bank has beefed up its monitoring and has employed IT for its monitoring. Thus, you will not be able to get away by committing irregularities.”

Once the central bank has decided to remove the chief executive officers or managing directors, it would not give in to any lobbying from influential quarters.

Rahman advised the bankers to stand tall to unjust pressures from the banks' boards. “You must learn the tactics to resist them.”

Rahman went on to criticise the media for creating much ado when it came to irregularities but not mentioning anything about the stern steps that the BB has taken to prevent them.

As the regulator of the financial sector, upholding the public's faith is the main responsibility for BB. “The central bank will exercise its highest power to maintain the faith.”

Meanwhile, the rate of interest on credit, the unpaid bills of some private banks by Sonali Bank pertaining to the Hall-Mark Group, the implementation of the Banking Companies Act, the harassment of customers by banks were also discussed at the meeting.

In connection with the Hall-Mark scam, Sonali Bank still owes Tk 1,754 crore to different banks, despite the several commitments it has made. Subsequently at the meeting, the banks expressed their annoyance with Sonali for not paying the bills.

The BB set a deadline of September 2016 for Sonali to pay the bills in phases; otherwise, it threatened to take legal action.

The state-run bank has been ordered to pay Tk 354 crore this year, Tk 700 crore in 2015 and the rest in 2016, according to SK Sur Chowdhury, BB deputy governor.

The new banking law came into effect in July last year, the provision for which was supposed to be implemented within one year of the act coming into effect.

The amended act stated that more than two directors from a family cannot be on the board of any bank, while the number of directors would be 20 and in every bank there will be two to three independent directors. At the meeting, the banks were instructed to imply it right away.

In yesterday's meeting the central bank issued a directive to inform it after complying with the orders.

While the private sector credit growth is way below the central bank's target of 16.5 percent, the BB governor cautioned banks from giving loans on ill considerations and to more risky and unproductive sectors.

Rahman also said some banks have been purchasing bad loans from other banks, which is of much concern. The central bank will strictly monitor the situation, he added.

BB also instructed the banks to remain careful so that industrial lending remains within their earlier promise of 15 percent.

If the customer clears off his/her debt before the repayment period expires, he/she should be given a rebate, the central bank said. At present, instead of giving a rebate, the customers are charged more.

 Social Islami Bank Limited arranged an Iftar Mahfil and discussion on “Importance of Sadakah and Role of SIBL’s cash waqf in Holy Ramadan” along with an “Iftar Mahfil” at a hotel in Dhaka recently.

Major (Retd) Dr. Md. Rezaul Haque, Chairman, Board of Directors of the bank was present as chief guest, said a press release.

Md. Shafiqur Rahman, Managing Director of the bank presided over the programme while directors of the bank were present as special guests.