The private sector credit recorded a slight growth in the month of March last following a substantial rise in import payments during the month, bankers said.
"Trade financing increased during the month of March primarily to foot the bills against the import of essential commodities ahead of the holy Ramadan," a senior official of a leading private commercial bank (PCB) said.
The private sector credit grew to 11.46 per cent or Tk 500.24 billion in March 2014 on a year-on-year basis from 10.73 per cent or Tk 465.48 billion in February last. It was 12.72 per cent or Tk 492.32 billion in March 2013.
A number of bankers serving private banks said the uptrend in private sector credit growth may also continue during the current month because of higher import payments.
Normally, a large quantity of essential commodities is imported to meet the additional demand of consumers during Ramadan, the holy month of fasting by Muslims.
The country's overall imports increased significantly in March 2014 due to higher import of food grains and petroleum products, a senior official of the Bangladesh Bank (BB) said.
The overall imports increased by 30.61 per cent to $3.44 billion in March last from $2.63 billion in the same period of the previous year, the BB data showed.
"The rising trend of import may continue until May due to Ramadan," the central banker noted.
Talking to the FE, another private banker said the private sector credit growth did not rise substantially despite a hefty growth of imports as some corporate entities do not prefer to borrow from the local banks to settle their import payments.
"Most of corporate entities are receiving loans from overseas sources to clear their import payments," the banker explained.
He also said credit demand is yet to be created as businessmen are still maintaining a wait-and-see policy to avoid financial risks.
"Uncertainty is still prevailing among the prospective investors' minds," the banker noted.
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