Bangladesh Bank (BB) yesterday warned five local and foreign commercial banks for violating their investment and credit limits.

The central bank issued letters to Bank Asia, Shahjalal Islami Bank, State Bank of India, National Bank of Pakistan and Exim Bank for violating their limits, sources said.

The central bank issued letters to Bank Asia and Shahjalal Islami Bank on Monday and to State Bank of India, National Bank of Pakistan and Exim Bank on Sunday. More letters would be issued to other violators in turns, bank sources said.

According to Bank Company Act, a bank has to preserve 19 percent of its total deposits to the central bank as Statuary Liquidity Ratio (SLR). The ceiling is 11.5 per cent for Islamic banks.

As on December 30, 2010 National Bank of Pakistan exceeded limit by 37.68 per cent, State Bank of India 28.72 per cent, Bank Asia 9.50 per cent, Exim Bank 15.18 per cent and Shahjalal Islami Bank 7.84 per cent.

For the reason, banks are suffering from acute liquidity crisis while the central Bank is also struggling to address the situation, analysts said.

News: Daily Sun /Bangladesh/18 Jan 2011