Pvt sector credit growth slumps to 13-year low

Posted by BankInfo on Sat, Aug 31 2013 12:05 pm
Private sector credit growth hit a 13-year low of 11.04 per cent in the recently concluded fiscal year 2012-13 due to political instability, higher interest rate on lending and bank scams, said economists and business leaders. According to the Bangladesh Bank data released on Thursday, the credit growth in the private sector slumped to 11.04 per cent in FY 2012-13 compared with that of 19.72 per cent in the FY12. A BB official said that the central bank’s initiative had failed completely to make the private sector vibrant by increasing the target of private sector credit growth for the monetary policy of January-June in 2013. The BB set a credit growth target of 18.50 per cent for the period instead of projected target of 18 per cent amid repeated demand from the business people. The BB data showed that the private sector posted a credit growth of 10.75 per cent in the FY 2000. The credit flow to the private sector had stood at Tk 4,52,925.10 crore in June of 2013 against Tk 4,07,901.60 crore in the same month of 2012. It was Tk 3,40,712.70 crore in June 2011. Dhaka University economics department chairman MA Taslim told New Age on Thursday that credit growth in the private sector declined in FY13 due to recent spates of political violence. The investment environment faced a major setback in the last one year and six months resulting in decline in the credit growth, he said. He said, ‘The BB took contractionary monetary policies consecutively in the period that also discouraged the business people to take loan with a higher interest rate to invest in the productive sector.’ Nobody is now making large-scale investment as they have adopted a ‘wait and see’ approach amid political unrest, he said. He said that credit growth in the private sector would decline further in the months to come if political uncertainty continues. The next year might be more tough for the private sector with unearthing of more bank scams, he said. A BB official said that the central bank had slashed its interest rates on repurchase agreement (repo) and reverse repo by 50 basic points on January 31, 2013 after nearly four years. The BB took the initiative to encourage new investments, particularly in the productive sectors, he said. But the initiative of the central bank has virtually failed as the scheduled banks did not cut down their rate of interest on lending, he said. Former Dhaka Chamber of Commerce and Industry president Asif Ibrahim told New Age that the higher bank rate of interest on lending was one of the main causes of declining trend in the private sector credit growth. The interest rate increased as the BB took a number of contractionary monetary policies in the last two years, he said. He said, ‘The Banking sector has recently faced a number of financial scams. For this reason, the banks have taken cautious policy to sanction and disburse loans which also played a role in declining trend in the credit flow to the private sector.’ The current political instability is also discouraging the businessmen to invest in new industrial units by taking loan, he said. The BB data showed that credit growth in the overall domestic sector slumped to 13.49 per cent in June compared with that of 19.56 per cent in the corresponding month of 2012. The total credit in the domestic sector in June stood at Tk 5,88,281.40 crore against Tk 5,18,335 crore in the same month of 2012. News:New Age Bangladesh/30-Aug-2013

Businesses get 66pc of SME loan

Posted by BankInfo on Sat, Aug 31 2013 11:30 am
The lion's share of a loan introduced for the development of the Small and Medium Entrepreneurs (SME) are being channelised in other sectors, according to a report by the Bangladesh Bank. Banks and financial institutions had disbursed around Tk 418.49 billion in the SME sector in the first six months of the current year. It is, however, 56.41 percent of loan disbursement target. Of the disbursed amount, Tk 277.7 billion went into the business sub-sector, accounting for 66.36 percent of the total amount. The sum was Tk 201.54 billion, or 62.48 percent of the total loan disbursed, in the same period the previous year. According to the report, the manufacturing sub-sector received Tk 118.69 billion, or 28.36 percent, of this year's loan amount. It received 32.44 percent of loan in the previous year. The service sub-sector got the least loan this year, a meagre 5.28 percent or Tk 22.1 billion. This year, the targeted SME loan disbursement by the banks and financial institutions has been fixed at Tk 741.87 billion. Central bank officials hope to beat the target by the end of the year, as several banks have recently started functioning. Last year, the disbursed loan in the SME sector was around 18 percent higher than the target. Banks and financial institutions loaned out Tk 697.53 billion against a Tk 590.13 billion goal. However, the report says, this year female entrepreneurs got around Tk 14.93 billion of the SME loan, while small entrepreneurs got only Tk 170.86 billion. General Manager of Bangladesh Bank's SME and Special Programmes Division, Sukomol Sinha Chowdhury, said banks face greater risks in trade financing. He said industry entrepreneurs were also getting loans, though in a smaller sums compared to last year. "I hope the industry sector will get expected loans by the end of December. Bangladesh Bank is encouraging banks to provide cluster-based loans," he told bdnews24.com. Chowdhury said although the financing in trades was big, they were expanding their economic activities. "It is having a positive impact on Bangladesh's overall economy," he said. He said the central bank was taking various steps to ensure real entrepreneurs got the loans. Bangladesh Bank's SME Division was also monitoring the quality of loan at the grassroots. "We are also scrutinising whether the real entrepreneurs were getting loans," Chowdhury said. News:The New Nation Bangladesh/30-Aug-2013

BASIC Bank opens branch at Dhaka Cantt

Posted by BankInfo on Sat, Aug 31 2013 09:46 am
Sheikh Abdul Hye Bacchu, Chairman, Board of Directors of BASIC Bank Limited, inaugurates the 63rd branch of the bank at Kochukhet at Dhaka Cantonment area in Dhaka on Thursday. ASIC bank Limited opened its 63rd branch at Kochukhet at Dhaka Cantonment area in Dhaka with fully online facilities. Sheikh Abdul Hye Bacchu, Chairman, Board of Directors of BASIC Bank Limited, inaugurated the branch on Thursday as chief guest, said a press release. Md Ruhul Alam, General Manager, moderated the function while Kazi Faqurul Islam, Managing Director of the bank presided over. Md Anwarul Islam, Anis Ahmed, Fazlus Sobhan, Directors and Kanak Kumar Purkayastha, Abdul Qayum Mohammad Kibria, Deputy Managing Directors of the bank were present at the function. While speaking, Sheikh Abdul Hye Bacchu, Chairman of the bank said the deposit of the customers is hundred percent secured as the bank is fully state-owned. News:Daily Sun Bangladesh/31-Aug-2013

Foundation training course for NCCB officials held

Posted by BankInfo on Sat, Aug 31 2013 09:41 am
Mohammed Nurul Amin, Managing Director and CEO of NCC Bank Limited, speaks at the inauguration of a month-long foundation training course in Dhaka recently. NCC Bank Training Institute arranged a month-long foundation training course for the officers of NCC Bank. Mohammed Nurul Amin, Managing Director and CEO of the bank attended in the opening ceremony as chief guest recently, said a press release. In his inaugural speech, he emphasised on importance of training and advised the participants to acquaint themselves with banking knowledge as they can take over future leadership of the bank. Additional Managing Director Golam Hafiz Ahmed and Deputy Managing Director TM Faruque Chowdhury were also present as special guests. Principal of the training institute Jagadish Chandra Debnath coordinated the training course. News:Daily Sun Bangladesh/31-Aug-2013

IBBL distributes saplings of different trees in Gaibandha

Posted by BankInfo on Sat, Aug 31 2013 09:37 am
GAIBANDHA: Islamic Bank Bangladesh Limited (IBBL), Gaibandha branch has been distributing saplings of different trees among the academic institutions including the beneficiaries in the district for the last few days. Bank sources said 6,151 saplings of fruit bearing, timber and medicinal trees would be distributed among the institutions and the beneficiaries under Rural Development Project during the current season. The objective of the saplings distribution is to protect the ecological balance, enhance the natural beauty and meet the demand of fruits and wood side by side with involving the beneficiaries in income generating activities. Meanwhile, as many as 3,000 saplings had already been disbursed to them free of cost, said project officer M. Sarwardi. On Wednesday, additional deputy commissioner (General) Abu Bakar Siddique formally inaugurated the saplings distribution among the academic institutions and the beneficiaries as the chief guest. — BSS News:Daily sun Bangladesh/31-Aug-2013
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