BB chief criticises PCBs for ignoring farmers' needs
Sunday, 24 January 2010
FE Report
Bangladesh Bank Governor Atiur Rahman has criticised the private banks for their apathy to support poor farmers although the agriculture sector helped the country overcome the effects of the global economic crisis.
"Private banks take deposits but do not give loan to the farmers. They should change their mindset," he said while addressing a workshop in the capital on Saturday.
The workshop styled 'Inclusive Banking: A means for Sustainable Development' was organised by Bangladesh Economic Association (BEA) in its office in the capital. BEA president Dr Quazi Kholiquzzaman Ahmad presided.
Dr Atiur said the country's 25 per cent adult population still remain out of formal banking services.
"More private banks should come forward by opening their branches in remote and under-developed areas to serve the customers still out of banking services," he said.
He reminded the bankers that the country was able to weather the effects of the global economic meltdown mainly because of significant contribution of agricultural sector.
The central bank chief said the banking sector should pursue a pro-poor role as their deposits are over Tk 2.5 trillion where the country's annual budget for the current fiscal year stands at Tk 1.13 trillion.
"Achieving a double digit growth will not be an illusion if banks come forward. And this growth will be sustainable as the demand will stem from grass-roots."
The governor said the central bank has made it mandatory for the state-owned banks to allow farmers open bank accounts at a deposit of only Tk 10.
"Other banks should do it as part of their social responsibility as it will benefit the country's over 18 million farmers."
Mr Atiur said the government gives subsidy on diesel to the farmers. "If the farmers can open bank account then they will receive money directly through the account, which will also cut corruption."
He said the country's economic growth rate is set to surpass the growth of pervious fiscal year due to dynamic economic activity.
"We are witnessing encouraging sign in opening letter of credit. The overall investment climate is also encouraging. I do not see any symptom of downward trend," Dr Atiur added.
He said the country would carry on with its own policies, rejecting the World Bank's recent projection about Bangladesh's downward economic growth.
"Unable to sustain on their own poor countries like Bangladesh sometimes are forced to accept their (donors) advice and find themselves in a worst situation."
"But we want to determine what to do, where and when to do it," he said.
The governor questioned the rationale behind payment of high salaries to top executives of the bank. "It is irrational if a bank's top official earns Tk 800,000 and his next man gets only Tk 30,000," he said.
Dr. Atiur said the central bank has given licence to some banks for introducing mobile banking. "They will transact through banking system."
"I hope many a banks will be able to take this service to the people. Mobile banking can boost the businesses."
He said banks should see inclusive banking as a business model, not as a matter of compliance. "We hope by next two years, Bangladesh will be a model of financial inclusion in the world."
Mr Atiur said scopes for investing in the country's small and medium enterprises (SMEs) have been created.
He said 99 per cent of the country's industries are SMEs, employing 58 per cent total workforce. "We have increased agriculture budget by 25 per cent this year. That is not enough as we still lag behind India."
Bangladesh Bank Governor Atiur Rahman has criticised the private banks for their apathy to support poor farmers although the agriculture sector helped the country overcome the effects of the global economic crisis.
"Private banks take deposits but do not give loan to the farmers. They should change their mindset," he said while addressing a workshop in the capital on Saturday.
The workshop styled 'Inclusive Banking: A means for Sustainable Development' was organised by Bangladesh Economic Association (BEA) in its office in the capital. BEA president Dr Quazi Kholiquzzaman Ahmad presided.
Dr Atiur said the country's 25 per cent adult population still remain out of formal banking services.
"More private banks should come forward by opening their branches in remote and under-developed areas to serve the customers still out of banking services," he said.
He reminded the bankers that the country was able to weather the effects of the global economic meltdown mainly because of significant contribution of agricultural sector.
The central bank chief said the banking sector should pursue a pro-poor role as their deposits are over Tk 2.5 trillion where the country's annual budget for the current fiscal year stands at Tk 1.13 trillion.
"Achieving a double digit growth will not be an illusion if banks come forward. And this growth will be sustainable as the demand will stem from grass-roots."
The governor said the central bank has made it mandatory for the state-owned banks to allow farmers open bank accounts at a deposit of only Tk 10.
"Other banks should do it as part of their social responsibility as it will benefit the country's over 18 million farmers."
Mr Atiur said the government gives subsidy on diesel to the farmers. "If the farmers can open bank account then they will receive money directly through the account, which will also cut corruption."
He said the country's economic growth rate is set to surpass the growth of pervious fiscal year due to dynamic economic activity.
"We are witnessing encouraging sign in opening letter of credit. The overall investment climate is also encouraging. I do not see any symptom of downward trend," Dr Atiur added.
He said the country would carry on with its own policies, rejecting the World Bank's recent projection about Bangladesh's downward economic growth.
"Unable to sustain on their own poor countries like Bangladesh sometimes are forced to accept their (donors) advice and find themselves in a worst situation."
"But we want to determine what to do, where and when to do it," he said.
The governor questioned the rationale behind payment of high salaries to top executives of the bank. "It is irrational if a bank's top official earns Tk 800,000 and his next man gets only Tk 30,000," he said.
Dr. Atiur said the central bank has given licence to some banks for introducing mobile banking. "They will transact through banking system."
"I hope many a banks will be able to take this service to the people. Mobile banking can boost the businesses."
He said banks should see inclusive banking as a business model, not as a matter of compliance. "We hope by next two years, Bangladesh will be a model of financial inclusion in the world."
Mr Atiur said scopes for investing in the country's small and medium enterprises (SMEs) have been created.
He said 99 per cent of the country's industries are SMEs, employing 58 per cent total workforce. "We have increased agriculture budget by 25 per cent this year. That is not enough as we still lag behind India."