Scheduled commercial banks with more than 85 percent of credit deposit ratio (CDR) have to bring down the ratio by this June or face stern action from the regulator, along with a low camels rating, the Governor has warned banks’ top executives.

The punitive measures might also include the central bank’s bar in opening up new branches by the banks, in line with the Banking Companies Act.

“Banks must have to control the CDR within the directed limit of 85 percent by June 2011 with simultaneous efforts of deposit increase and credit decline. Otherwise, they have to concede a lower grade in camels rating in addition to some punitive measures complying with the Banking Act,” Dr Atiur Rahman told the managing directors of Banks at a meeting at the BB headquarters in the city.

He also drew attention of the top bankers to some complaints that banks are reluctant to provide loans to productive sectors and some essential imports.

“To rein in inflation is our main agenda. At the same time, we have to be farsighted to achieve our growth target. Banks have to be more careful that productive sectors get priority instead of the unproductive ones,” Atiur said.

About the liquidity situation, the Governor said BB has kept up its continued efforts to pump local and foreign currencies into the circulation. But, banks themselves can and should do to improve market liquidity further, just with pro-activity towards quicker repatriation of proceeds of booming exports of their clients.

Export receipts are lagging export shipments by nearly USD 2 billion; hastening collection of even a fraction of this will ease both Taka and forex liquidity in the market considerably, in turn easing pressures on Taka exchange rates and interest rates, he added.

“I would strongly urge you (bank CEOs) to see that export desk staffs in your AD branches are active in timely collection of export bills from abroad and your import desk staffs are in meeting import bill payments,” Atiur said.

BB deputy governor Nazrul Huda, however, alleged that Banks are frequently violating BB directives.

“Commercial banks are violating BB directives in re-scheduling their loans. They are not providing facts in their income-expenditure and profit statements,” he said while briefing reporters after the meeting.

Chaired by the Governor, the meeting was also attended by deputy governor Murshid Kuli Khan.

News: Daily Sun/ Bangladesh/ May-12-2011