The central bank has warned banks against excess flow of consumer credit that might lead to create instability in the economy.   Banking Regulations and Policy Department (BRPD) of Bangladesh bank (BB) has issued a circular in this regard on Wednesday.

“The BB found that some banks have excess consumer loans and less credit to the productive sector. It might lead to unfavourable situation in the economy,” reads the BB circular.

In the circular, the BB has asked all the scheduled banks to tighten credit flow to non-productive sector and ensure adequate credit to the productive ones.

The central bank won’t allow any bank to approve cumulative consumer loans above the average credit ratio of total assets, reads the circular.

The Independent/Bangladesh/ 26th April 2012