Unlike the cash-strapped state banks, private commercial banks are sitting on surplus funds to the tune of Tk 20,000-25,000 crore, which indicates a slower demand for loans in the market, according to banks.

The loan-deposit ratio of the private banks has gone down significantly from the Bangladesh Bank's permissible limit of 85 percent. Call money rate has also come down to the single-digit level, which was unthinkable a few months ago.

Top bankers identified a set of reasons for an increase in liquidity in the banking industry.

The reasons include: infrastructure constraints, a low demand for loans, high lending rates, new rules on provisioning, tightening of imports and consumer loans, a decline in government's borrowing from banks, a rise in remittances and availability of loans from foreign sources.

The central bank's new rules to devolve investment in government securities to all banks from primary dealer (PD) banks alone created some funds for the PD banks.

“Imports and the private sector's demand for loans have gone down. But the growing tendency to borrow from foreign sources has created the surplus fund,” said Nurul Amin, managing director of NCC Bank.

Amin said local private companies borrowed $2 billion from foreign sources this year.

He said many banks are now investing in short-term treasury bills to earn something from their excess liquidity.

NCC Bank's present loan-deposit ratio is at 77 percent, meaning the bank gave Tk 77 as loans against a deposit of Tk 100.

The ratio is 71-72 for Mutual Trust Bank, which reflects a poor demand for loan.

“Disbursements are substantially lower than the credit facility in place,” said Anis A Khan, managing director of the bank.

His bank's surplus money is at around Tk 700-800 crore.

Khan said the government's borrowing from the banking sector has declined in the last 4-5 months. He sees the central bank's measures regarding the PD banks have also reduced the liquidity pressure on them.

Helal Ahmed Chowdhury, managing director of Pubali Bank, said a rise in remittances and a fall in imports have created some additional funds for the banks.

Chowdhury said his bank has nearly Tk 1,000 crore unused funds now.

SA Farooqui, managing director of Standard Bank that has Tk 800 crore unused funds, said a substantial reduction in import of food grains and 'any purpose loan' has contributed to an increase in the banks' funds.

Shafiqul Alam, additional managing director of United Commercial Bank that has Tk 1,000 crore in surplus funds, said they have been facing a shortage of borrowers in the call money market.

The call money rate, which was 10.21 percent on November 5, went down by nearly 2 percentage points to 8.26 percent on Monday.

central bank data shows excess reserves, which are equal to the balance of the scheduled banks' deposits held with the BB minus their cash reserve requirement or CRR, have also increased to Tk 18,011 crore as on Monday from Tk 14,520 crore on Tuesday last.

Muklesur Rahman, deputy managing director of Eastern Bank, explained the situation a bit differently.

“Banks have concentrated more on recovery than lending. They are busy with their housekeeping,” Rahman said.

News: The Daily Star/Bangladesh/21-Nov-12

Dr. AB Mirza Azizul Islam, former advisor of the caretaker government hands over ‘Strong Rated Banks Award 2012’ to Md. Mofazzal Hossain, Deputy Managing Director of Al-Arafah Islami Bank Ltd at a function in Dhaka recently.

The Industry, a financial weekly, awarded ‘Strong Rated Banks Award 2012’ to Al-Arafah Islami Bank Limited as per the international assessment method of capital, asset and management.

The award was handed over at a function in Dhaka recently. From 47 banks of the country, the organisers catagorised eight banks as ‘Strong Rated Bank’ which includes Al-Arafah Islami Bank Limited, said a press release.

The award distribution was held at the conference hall of FARS Hotel in Dhaka recently.

Former advisor to a caretaker government Dr. AB Mirza Azizul Islam was present as chief guest and handed over the award to Md. Mofazzal Hossain, Deputy Managing Director of Al-Arafah Islami Bank Ltd.

Among others, former deputy governor of Bangladesh Bank Ataul Haq, President of the Association of Bankers’ Bangladesh (ABB) Md. Nurul Amin, President of the Global Economist Forum Bangladesh Chapter Shah Md. Nurul Alam and Editor of The Industry Enayet Karim were present on the occasion.

Top executives of the banking sector attended the awarding ceremony.

News: The Daily Sun/Bangladesh/20-Nov-12

Engr. Mohammad Abul Bashar, Deputy Managing Director of IBBL, seen at the business development conference for the Bank officials of Khulna Zone in Jessore recently.

Islami Bank Bangladesh Limited organised business development conference for its officials of Khulna Zone in Jessore recently.

Engr. Mohammad Abul Bashar, Deputy Managing Director and Head of ICT Wing of the Bank was present in the programme as chief guest, said a press release Monday.

Md. Obaidul Haque, Executive Vice President of the Bank presided over the function.

News: The Daily Sun/Bangladesh/20-Nov-12

AAM Zakaria, Managing Director of First Security Islami Bank Limited inaugurates an ATM Booth at Bohaddarhat, Chittagong recently.

First Security Islami Bank Limited opened an ATM Booth at Bohaddarhat, Chittagong recently.

AAM Zakaria, Managing Director of the bank opened the booth.

Deputy Managing Directors of the bank Md. Abdul Quddus and Syed Waseque Md. Ali, SEVPs Kazi Osman Ali and Syed Habib Hasnat, Zonal Head Quazi Latiful Islam, branch managers of Chittagong zone were also present on the occasion.

News: The Daily Sun/Bangladesh/20-Nov-12

The government will include two ministries in the working committee on National Coordination on Anti-money Laundering to deal with money-laundering issues more efficiently.

The ministries are—Commerce Ministry and Housing and Public Works Ministry.

Earlier, the Financial Intelligence Unit of Bangladesh Bank in a letter urged the Banking and Financial Institution Division of the finance ministry to insert two ministries to the 12-member committee, a senior official of the central bank Monday said.

The official also said the two ministries would be included since several reporting agencies have already been incorporated under the existing Anti- Money Laundering Prevention Act, 2009.

The reporting agencies are include real estate developers, cooperative societies, Jewellary shops and various professional groups, including lawyers, notary publics and accountants.

Sources said two representatives of the commerce and housing and public work’s ministries will attend the next meeting of the working committee on national coordination on anti-money laundering.

Currently, the 12-member committee on anti-money laundering comprised of members from the finance ministry, Bangladesh Bank, National Board of Revenue, and Anti-Corruption Commission (ACC).

News: The Daily Sun/Bangladesh/20-Nov-12