The Bangladesh Bank riding on immediate and proactive policy interventions has managed to stop financial bleeding in the banking sector, but achieving full stability will require more time, its officials say.
Spokesperson for the central bank Husne Ara Shikha made the observation while briefing the media at the central bank headquarters in the capital on Tuesday.
"The good sign is that the central bank managed to address the critical risks in the financial sector. Now it is working on bringing back complete stability in the sector through various measures, but that will take time," she said.
Sharing some of the initiatives the regulator took in recent times, she said they had restructured the boards of several crisis-hit commercial banks, formed a special banking task force, made efforts to stabilise the foreign exchange market, and used inflation control strategies.
"Some of the initiatives have produced dividends, while getting the yield from others will require more time," Shikha, also an executive director of the Bangladesh Bank, said.
Speaking about controlling inflation, she said the central bank enhanced the policy rate for several items in recent months. "Hopefully, inflation will go down in the coming days."
When asked about the frequent rise in policy rate hampering private sector investments, she said corporate business expansion depends on too many components and policy rate is one of them. "Physical infrastructure, uninterrupted supply of energy, port facilities, and favourable tax structures also play a vital role in raising the demand for formal credit in the private sector," she added.
Regarding non-performing loans (NPLs), she said banks earlier had not given the real NPL situation, but the central bank under the new leadership had instructed commercial lenders to present the actual scenario of classified loans.
"The volume of bad loans could even cross Tk 6.0 trillion once real data is analysed."
jubairfe1980@gmail.com