Industrial credit flow up 28.44pc in FY '07
Friday, 31 August 2007
FE Report
Industrial credit flow significantly increased to 28.44 per cent in the last fiscal compared to the previous fiscal mainly due to increased import of capital machineries for some emerging sectors including textiles, telecommunications, energy and power.
The recovery of the credit has also increased to 34.16 per cent during the period under review as the banks and financial institutions intensified their recovery drive in line with the Bangladesh Bank (BB) directives, sources in the central bank said.
The disbursement of industrial term loans stood at Tk 123.94 billion in the fiscal 2006-07. A total of Tk 96.50 billion was disbursed in the previous fiscal, according to the BB's statistics.
In the last fiscal, the industrial credit recovery was Tk 90.68 billion compared to Tk 67.59 billion of the previous fiscal.
The flow of industrial credit disbursement, however, declined by Tk 2.93 billion in the third quarter over the previous quarter in the same fiscal due to political unrest.
A total of Tk 29.11 billion was disbursed in the January-March period of the last fiscal against Tk 32.04 billion in the October-December period of the same fiscal, the BB's data showed.
The loans were disbursed through both individuals and syndications among the commercial banks and non-banking financial institutions in the last fiscal, sources in the banking sector said.
Sources, however, said the textile, telecommunications and energy and power sectors have received the lion's share of the credit during the period.
The import of capital machinery grew by 14.63 per cent in the fiscal 2006-2007. It was 9.68 per cent for industry machineries.
The import of capital machinery reached $1.544 billion in the last fiscal against $1.347 billion of the previous fiscal, according to the central bank statistics.
"We are hopeful about continuing the flow of industrial credit in the current fiscal," a BB senior official told the FE Thursday, adding that the recovery of the credit has increased following strict monitoring by the central bank.
But the commercial bank officials said it is difficult to predict whether the overall disbursement growth of the industrial credit would continue or not. If the entrepreneurs come forward the growth can be maintained, otherwise it will reverse.
"Most of the commercial banks have excess liquidity that they can easily inject into the industrial sector," a senior official of a commercial bank told the FE.
Another senior official of a nationalised commercial bank expressed the opinion that while entrepreneurs will seek credits according to their needs, the bankers should also apply their marketing tools to extend credit to the potential clients.
The BB's data showed that both overdue and outstanding industrial term loans at the end June 2007 stood at Tk 40.12 billion and Tk 337.21 billion respectively.
Overdue as percentage of outstanding industrial term loans, however, have improved, decreasing from 14.10 per cent at the end of June, 2006 to 11.90 at the end of June 2007.
Industrial credit flow significantly increased to 28.44 per cent in the last fiscal compared to the previous fiscal mainly due to increased import of capital machineries for some emerging sectors including textiles, telecommunications, energy and power.
The recovery of the credit has also increased to 34.16 per cent during the period under review as the banks and financial institutions intensified their recovery drive in line with the Bangladesh Bank (BB) directives, sources in the central bank said.
The disbursement of industrial term loans stood at Tk 123.94 billion in the fiscal 2006-07. A total of Tk 96.50 billion was disbursed in the previous fiscal, according to the BB's statistics.
In the last fiscal, the industrial credit recovery was Tk 90.68 billion compared to Tk 67.59 billion of the previous fiscal.
The flow of industrial credit disbursement, however, declined by Tk 2.93 billion in the third quarter over the previous quarter in the same fiscal due to political unrest.
A total of Tk 29.11 billion was disbursed in the January-March period of the last fiscal against Tk 32.04 billion in the October-December period of the same fiscal, the BB's data showed.
The loans were disbursed through both individuals and syndications among the commercial banks and non-banking financial institutions in the last fiscal, sources in the banking sector said.
Sources, however, said the textile, telecommunications and energy and power sectors have received the lion's share of the credit during the period.
The import of capital machinery grew by 14.63 per cent in the fiscal 2006-2007. It was 9.68 per cent for industry machineries.
The import of capital machinery reached $1.544 billion in the last fiscal against $1.347 billion of the previous fiscal, according to the central bank statistics.
"We are hopeful about continuing the flow of industrial credit in the current fiscal," a BB senior official told the FE Thursday, adding that the recovery of the credit has increased following strict monitoring by the central bank.
But the commercial bank officials said it is difficult to predict whether the overall disbursement growth of the industrial credit would continue or not. If the entrepreneurs come forward the growth can be maintained, otherwise it will reverse.
"Most of the commercial banks have excess liquidity that they can easily inject into the industrial sector," a senior official of a commercial bank told the FE.
Another senior official of a nationalised commercial bank expressed the opinion that while entrepreneurs will seek credits according to their needs, the bankers should also apply their marketing tools to extend credit to the potential clients.
The BB's data showed that both overdue and outstanding industrial term loans at the end June 2007 stood at Tk 40.12 billion and Tk 337.21 billion respectively.
Overdue as percentage of outstanding industrial term loans, however, have improved, decreasing from 14.10 per cent at the end of June, 2006 to 11.90 at the end of June 2007.