BB reviews overall credit flow to pvt sector today
Tuesday, 12 June 2007
FE Report
The Bangladesh Bank (BB) is going to review the overall credit flow to the private sector against the backdrop of its declining trend during the first nine months of the current fiscal.
The credit flow will be reviewed at a bankers' meeting to be held at the central bank today (Tuesday) with the BB Governor Salehuddin Ahmed in the chair, official sources said.
Credit growth to the private sector declined by 1.55 percentage points in the period because of the political uncertainty and cautious monetary policy of the central bank, sources in the banking sector said.
The private sector credit growth rate fell to 11.02 per cent in the July-March period of the fiscal 2006-07 from 12.57 per cent in the same period of the previous fiscal, the central bank data showed.
According to the BB statistics, the overall bank credit to the private sector stood at Tk 144.32 billion in the period against Tk 139.19 billion in the corresponding period of the pervious fiscal.
"We don't impose any restriction on disbursement credit to the private sector," a BB senior official told the FE Monday, adding that the central bank will review the overall private sector credit flow at the bankers meeting.
He also said the central bank is now consulting with bankers for preparation of the next monetary policy, which will be published next month.
However, the bankers said the trade finance will continue to increase in the near future due to higher import of some essential commodities, raw materials, intermediate goods and petroleum products.
"The rise in trade credit will continue due to import of some essential items to meet the growing demand of the commodities in the local markets," a senior official of a private commercial bank told the FE.
He also said the overall credit growth will increase if the investors' confidence is restored fully.
Besides, the central bank may ask the commercial banks to expedite the process of opening of letters of credit (LCs) against imports to ensure supply of the essential items in the local markets.
At the same meeting, the BB will review the overall import situation of the essentials commodities and also ask the banks to take more careful measures to check forgery of bank instruments like pay order and draft.
The meeting is likely to discuss appointment of the private agency to recover default loans and involvement of PCBs in disbursement of agricultural credit across the country.
Currently, at least three PCBs - National Bank Limited, National Commerce and Credit (NCC) Bank Limited and Islami Bank Bangladesh Limited - are disbursing farm credit.
The Bangladesh Bank (BB) is going to review the overall credit flow to the private sector against the backdrop of its declining trend during the first nine months of the current fiscal.
The credit flow will be reviewed at a bankers' meeting to be held at the central bank today (Tuesday) with the BB Governor Salehuddin Ahmed in the chair, official sources said.
Credit growth to the private sector declined by 1.55 percentage points in the period because of the political uncertainty and cautious monetary policy of the central bank, sources in the banking sector said.
The private sector credit growth rate fell to 11.02 per cent in the July-March period of the fiscal 2006-07 from 12.57 per cent in the same period of the previous fiscal, the central bank data showed.
According to the BB statistics, the overall bank credit to the private sector stood at Tk 144.32 billion in the period against Tk 139.19 billion in the corresponding period of the pervious fiscal.
"We don't impose any restriction on disbursement credit to the private sector," a BB senior official told the FE Monday, adding that the central bank will review the overall private sector credit flow at the bankers meeting.
He also said the central bank is now consulting with bankers for preparation of the next monetary policy, which will be published next month.
However, the bankers said the trade finance will continue to increase in the near future due to higher import of some essential commodities, raw materials, intermediate goods and petroleum products.
"The rise in trade credit will continue due to import of some essential items to meet the growing demand of the commodities in the local markets," a senior official of a private commercial bank told the FE.
He also said the overall credit growth will increase if the investors' confidence is restored fully.
Besides, the central bank may ask the commercial banks to expedite the process of opening of letters of credit (LCs) against imports to ensure supply of the essential items in the local markets.
At the same meeting, the BB will review the overall import situation of the essentials commodities and also ask the banks to take more careful measures to check forgery of bank instruments like pay order and draft.
The meeting is likely to discuss appointment of the private agency to recover default loans and involvement of PCBs in disbursement of agricultural credit across the country.
Currently, at least three PCBs - National Bank Limited, National Commerce and Credit (NCC) Bank Limited and Islami Bank Bangladesh Limited - are disbursing farm credit.