Don't give loans to polluting industries: Atiur

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FE Report
Bangladesh Bank Governor Atiur Rahman Saturday urged the banks not to provide loans to polluting industries. Otherwise they will have to pay price when it comes to CAMELS rating and other facilities.
"The central bank will no longer encourage banks to provide loans to factories still damaging the environment," he said while addressing a seminar in the capital.
Bangladesh Bank Training Academy organised the seminar on 'Climate Change: Its impacts and responses' at its auditorium, with its executive director Devaki Kumar Saha in the chair.
Mr Atiur Rahman said the government has decided to shift Hazaribagh-based tanneries to Savar by 2010, but the progress is very slow.
"We should have set up a central effluent treatment plant (ETP) in Savar either at taxpayers' money or under public-private partnership initiative before relocating them there."
The BB is providing loans up to Tk 10.0 million to polluting industries including the tanneries from its Tk 2.0 billion refinancing scheme so that they can set up ETP.
The loan amount may increase to Tk 50.0 million if they come up with ideas, the governor said, adding the central bank is ready to help entrepreneurs set up ETP, solar panel and windmill under its refinancing scheme.
He said the banks should not provide loans to those factories which still pollute the environment. "Many banks may still provide loans to the polluting industries. They have to pay price when it comes to CAMELS rating."
"The central bank has a major role to play while sanctioning loans for any big project. In the past, it was only busy in making monetary policy or generating employment. But that concept is obsolete today. Now, the bank has to be development-minded."
Mr Atiur Rahman said the central bank is opening a small and medium enterprises (SMEs) department to offer loans to the country's cash-starved entrepreneurs.
"Targets would be set for the banks. Besides, 15 per cent of the SME loans will go to women entrepreneurs. If any bank fails to comply with the direction they would be deprived of facilities under the central bank's refinancing schemes."
Palli Karma-Sahayak Foundation (PKSF) Chairman Qazi Kholiquzzaman Ahmad said Bangladesh has successfully presented its concerns in the Copenhagen Summit in Denmark.
"All participants have admitted that the situation is deteriorating quickly. The summit has paved the way for reaching a settlement on the issue in Mexico next year."
He said Bangladesh has already prepared a climate change strategy and action plan on how the country would proceed and manage the issue. "Many were surprised when they came to know this during the Copenhagen Summit."
The government has already allocated Tk 7.0 billion in the current budget, he said chastising the slow-moving bureaucracy for failing to spend a single taka from the climate change fund.
The Aila-refugees should get priority in distribution of the fund as they are still leading inhuman life after more than one year of the cyclone, Kholiquzzaman said adding: "We have to adapt and at the same time mitigate."