BB plans five-year strategy, offers to help banks on import payment

FE Team | Published: July 22, 2009 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The Bangladesh Bank (BB), for the first time, is going to introduce a five-year strategic plan for the banking sector, the governor said Tuesday.
"We've already taken preparation to introduce such a strategic plan," the central bank Governor Atiur Rahman told reporters, adding that the BB is thinking of starting its implementation from January 1, 2010.
The same day in a luncheon meeting with the American Chamber of Commerce (AmCham) in Bangladesh, the BB governor offered to help banks on import payment as the foreign exchange reserve rose by half a billion dollars in the last one week.
However, about the five-year strategic plan, he said the plan will be for the country's other banks as well as for the central bank itself focusing on different aspects including monetary policy, human resource development, automation and credit information bureau (CIB).
"The plan incorporates the BB's vision and target, which will have to be achieved for the overall improvement of the country's banking sector," the central bank governor added.
The plan for 2010-2015 will be released in a book format.
However, at the AmCham meeting at a city hotel, he said, "The forex reserve is at a comfortable level of $7.4 billion and Bangladesh Bank, if requested by the commercial banks, will provide funds to them to help importers."
Investors should not worry about funding as funds are available with banks, he said.
"Government's borrowing from banks will not limit the investors' scope as it never fulfills its target of borrowing," he added.
The governor said share-croppers will get Tk 5.0 billion (500 crore) in loan in addition to Tk 115 billion in farm credit under the agriculture credit policy.
"The central bank has declared the policy and it will monitor farmers' access to loans," he said.
It will be difficult to disburse loans to the share-croppers as they cannot provide any collateral, but the Bangladesh Bank will try to make it a success, he said.
"Private sector banks are not interested in rural lending but we will encourage them to disburse loans to the sector with involvement of non-government organisations," he added.
A synergy between information technology and banking system will reduce the service costs and eventually ensure poor people's access to funding, he explained.
"A short-message-service (SMS) can reduce the traditional information sharing costs and the banks and the telecom service providers can jointly cut down the costs," he said.
It is expected that the country will achieve 5.5 to 6 per cent growth rate in the ongoing fiscal if the Western economies turn around in the later half of the year, he added.
AmCham President Syed Ershad Ahmed said the central bank should work independently to regulate the financial institutions.
He urged the BB governor to change the decades-old Foreign Exchange Regulation Act to make foreign exchange transactions easier.
The meeting was also attended by US Ambassador James F Moriarty, AmCham vice president Trevor Macdonald and a large number of businessmen and diplomats.