Flow of bank credit to private sector in May up
Siddique Islam | Thursday, 17 July 2008
Credit growth to the private sector recorded a 25 per cent rise in May last over that of the same period of the previous year, officials said.
"The credit increased during the period mainly to real sectors and used for financing import of oil and other commodities," a senior official of the Bangladesh Bank (BB) told the FE Wednesday.
Credit to the private sector rose by 24.53 per cent to Tk 363.27 billion in May compared to a 15.57 per cent growth in the corresponding period of the previous year, according to the central bank statistics.
"BB's pro-growth monetary policy helped the upward trend in private sector credit during the period," another BB official said, adding that the credit flow to the private sector might have declined in the month of June last because of fiscal year ending.
On January 10 last, the central bank announced its fifth monetary policy aiming to achieve higher economic growth through expansion of credit to the real sectors while keeping inflationary pressure under control.
Besides, the BB earlier asked the commercial banks to increase investment in the productive sectors, particularly in agriculture, small and medium enterprises (SMEs), construction sector, infrastructure, and other rural activities, for recouping the losses caused by floods and cyclone, they added.
Expressing similar views, a senior official of a private commercial bank (PCB) said the uptrend in private sector credit may not be there in the near future due to 'fund constraint' in the banking system.
He also said: "Higher prices of most essential items, including food grains and fuel, in the international market led to private sector credit growth during the period under review."
The country's overall import crossed US$20 billion-mark in the just concluded fiscal for the first time resulting from crop losses by natural disasters and price hike of oil and commodities in the global market.
In fiscal 2007-08 (FY08), two back-to-back floods and a devastating cyclone hit the country latter part of last fiscal, which were responsible for higher import of essential items, he said.
On the other hand, agriculture credit disbursement increased significantly in the last fiscal, recording a 62.13 per cent growth against the previous fiscal.
"Disbursement of agricultural credit during FY08 stood at Tk 85.80 billion due to inclusion of private commercial banks compared to Tk 52.92 during FY07," the BB said in its 'Major Economic Indicators: Monthly Update'- July 2008.
"The credit increased during the period mainly to real sectors and used for financing import of oil and other commodities," a senior official of the Bangladesh Bank (BB) told the FE Wednesday.
Credit to the private sector rose by 24.53 per cent to Tk 363.27 billion in May compared to a 15.57 per cent growth in the corresponding period of the previous year, according to the central bank statistics.
"BB's pro-growth monetary policy helped the upward trend in private sector credit during the period," another BB official said, adding that the credit flow to the private sector might have declined in the month of June last because of fiscal year ending.
On January 10 last, the central bank announced its fifth monetary policy aiming to achieve higher economic growth through expansion of credit to the real sectors while keeping inflationary pressure under control.
Besides, the BB earlier asked the commercial banks to increase investment in the productive sectors, particularly in agriculture, small and medium enterprises (SMEs), construction sector, infrastructure, and other rural activities, for recouping the losses caused by floods and cyclone, they added.
Expressing similar views, a senior official of a private commercial bank (PCB) said the uptrend in private sector credit may not be there in the near future due to 'fund constraint' in the banking system.
He also said: "Higher prices of most essential items, including food grains and fuel, in the international market led to private sector credit growth during the period under review."
The country's overall import crossed US$20 billion-mark in the just concluded fiscal for the first time resulting from crop losses by natural disasters and price hike of oil and commodities in the global market.
In fiscal 2007-08 (FY08), two back-to-back floods and a devastating cyclone hit the country latter part of last fiscal, which were responsible for higher import of essential items, he said.
On the other hand, agriculture credit disbursement increased significantly in the last fiscal, recording a 62.13 per cent growth against the previous fiscal.
"Disbursement of agricultural credit during FY08 stood at Tk 85.80 billion due to inclusion of private commercial banks compared to Tk 52.92 during FY07," the BB said in its 'Major Economic Indicators: Monthly Update'- July 2008.