23.47pc rise in industrial term loan disbursement

Economists aired an upbeat note that a sound growth of total industrial term loans during the April-June period this year would help in removing sloth in industrialisation and creating new employment opportunities.
Positive disbursement growth of industrial term loans and recovery are good signs for the banks amid competition stemming from foreign borrowing encouraged by the central bank, they said.
As per the central bank's statistics, disbursement of the total industrial term loans during April-June 2014 was higher by 23.47 per cent or Tk 114.62 billion compared to Tk 92.83 billion during January-March quarter.
Professor of Dhaka University Economics department Suzana Karim said though Bangladesh could narrowly escape the effect of the global economic meltdown, it was yet to recover from the slowdown caused by the recent domestic political unrest.
Referring to the central bank's count on term-loan-disbursement growth during April-June period, she said, "The trend is positive and it might also be higher during July-September period."
Ms Karim thinks that the growth in industrial loans will create employment opportunities and help achieve the projected GDP growth.
Another economist, Dr Md Abu Yousuf, of the same department of Dhaka University, said the local banks are under pressure for encouraging lower-rated foreign loans under the central bank's policy.
He said to increase industrial term loans and spur the economic activity it is inevitable to lower interest rates by the local banks.
Referring to the 'Celebrating Event Commemorating 110 Years of Service' of the Metropolitan Chamber of Commerce and Industry (MCCI), held Saturday, Mr Yousuf said the issue of lowering interest rates by the local banks was widely discussed at the meeting.
He said, "Employment generation has not taken place as per requirement over the last several years as there are not enough big-scale fresh investments in the economy."    
A Bangladesh Bank (BB) source said the first-quarter data of the current fiscal year (FY) would be available after two months.
The BB statistics show that recovery of total industrial term loans recorded a rise of 3.76 per cent and stood at Tk 101.78 billion during April-June 2014 against Tk 98.10 billion during the previous quarter.
Amount of outstanding industrial term loans at the end of this past June stood at Tk 1,003.95 billion--11.14 percent higher than that of June-end of 2013.
According to a senior banker, the central bank's strict monitoring has helped recover loans. "It's positive for a healthy money market," he says.
Thanks to the central bank's strict monitoring, he noted, incidents of loan diversion and misuse are declining drastically.
Former chairman of Shahjalal Islami Bank Limited Engr Towhidur Rahman said banks' positive steps towards lowering returns in competition with foreign credits will help the industrial sector to grow.
He said if the banks' current steps continue with adequate electricity and political stability, industrial term-loan disbursement would increase in the coming days.
Former vice-president of the MCCI Kamran T Rahman said, "So far as I know, the banks are flooded with cash but it is not clear to me whether the disbursement is happening as per need or not."  

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