The state-owned Janata Bank Limited has suspended local and foreign purchase bill payment service recently due to fund shortage.

The Asset Liability Committee (ALCO) of Janata Bank has made the decision in a recent meeting presided over by Bank’s Chief Executive Officer (CEO) and Managing Director SM Aminur Rahman. The Bank authorities issued a circular to this effect last week to inform the matter to local exporters.

Meanwhile, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President M Shafiul Islam sent a letter to Banking Division Secretary Shafiqur Rahman Pathwari to express their concern about the suspension move. In the letter, he urged the government to make Janata authorities alter its decision for the sake of the garment exporters.

Local garment manufacturers are facing tough international competition due to a recession-like situation in the Eurozone countries, reducing per unit price of apparel items, the letter also reads.

A huge number of country’s working force is employed in the RMG sector, the letter said, adding that apparel manufacturers would face a huge crisis to pay workers’ salary if they fail to en-cash their bills.

About the apparel exporters’ concern, Banking Division Secretary Shafiqur Rahman Pathwari told daily sun on Monday, “We have already received the letter from the BGMEA and will inform the matter to finance minister,” Meanwhile, the financial health of the state-owned commercial banks (SCBs) has deteriorated in last three years because of concerned authorities’ failure to manage their activities properly, Banking Division sources said.

In recent months, the easy access to SCB funds by the government to meet the latter’s financing needs, in the context of growing budget deficit and deteriorating balance of payment (BOP) problems in the outgoing fiscal year, has further aggravated the situation.

The deposit growth of four SCBs including Janata has declined in recent months compared to their credit growth, which indicates their weak treasury management, Banking Division official said.

Last year Janata Bank took loan from the call money market to meet its regular financing needs, according to Bangladesh Bank information. However, Janata Bank’s classified loans were the lowest among the SCBs at the end of 2011. The deposit of the bank has scaled up to Tk 36.185 billion which was also 26.27 percent higher than that of the previous year.

The Daily Sun/ Bangladesh/ 15th May 2012