Private sector credit growth increased slightly in November last in view of rising trend in trade financing along with higher imports of capital machinery, bankers said.
The private sector credit growth rose to 12.67 per cent in November 2014 on a year-on-year basis from 12.12 per cent in October last. It was 11.15 per cent in September 2014.
 "The rising trend of private sector credit growth continued in the last two months of the last calendar year. But it may fall in the first month of the new calendar year if the political turmoil continues," a senior official of a leading private commercial bank (PCB) told the FE Monday.
He also said most of the banks are offering lower interest rates on lending only for priority customers who now prefer foreign currency loan from overseas sources to expedite their credit flow.
 "Some banks have already slashed interest rates on lending aiming to increase their credit flow to the private sector in line with the central bank advice," the private banker noted.
The Bangladesh Bank (BB) earlier advised the banks to take necessary measures for boosting disbursement of credits to the private sector in line with the ongoing Monetary Policy Statement (MPS).
The central bank has set the ceiling for private sector credit growth at 16.5 per cent including foreign borrowing while 14 per cent from local sources for the July-December period of the current fiscal year (FY) 2014-15.
 "The ceiling is set in a way that up to this limit inflation will not be under pressure," a BB senior official said adding that there is a scope for increase in private credit growth further without causing inflationary pressure on the economy.  Â
Talking to the FE, a senior official of a leading state-owned commercial bank (SoCB) said the prevailing political turmoil is an obstacle to increasing the private sector credit growth as well as the overall business activities.
 "The upward trend of private sector credit growth will continue if the political impasse is solved immediately," the SoCB official observed.
Total outstanding private sector loans stood at Tk 5,310.51 billion as of November 2014 against Tk 4,713.19 billion in the corresponding period of the last year. It was Tk 4,248.18 billion in November 2012, according to the central bank statistics.
The country's overall imports increased by more than 11 per cent in the first five months of the FY 15Â due mainly to higher import of fuel oils and capital machinery.
The actual import in terms of settlement of letters of credit (LCs) grew by 11.36 per cent to US$16.20 billion during the July-November of FY 15 from $14.55 billion in the corresponding period of the previous fiscal, the BB data showed.
Fuel oil import increased by 28.30 per cent to $1.87 billion during the period under review against $1.46 billion of the corresponding period of the previous fiscal.
On the other hand, import of capital machinery or industrial equipment used for production rose by 21.29 per cent to $1.15 billion during the July-November period of the FY 15 against $948.73 million of the corresponding period of the FY 14.
 "Higher import for power and energy, leather and tannery machinery, electronic industry machinery, food processing, ceramic and melamine industry have contributed to rise in the overall capital machinery imports during the period under review," a senior BB official told the FE earlier.
siddique.islam@gmail.com
Slight rise in private sector credit growth in November
Siddique Islam | Published: January 13, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
Share if you like