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Disbursement of industrial loans falls by 28pc in Q3

Siddique Islam | June 21, 2015 00:00:00

The disbursement of industrial term loans dropped by more than 28 per cent in the third quarter (Q3) of the outgoing fiscal year (FY) 2014-15 mainly due to political turmoil, officials said.

The disbursement of industrial term loans came down to Tk 133.51 billion in the Q3 of FY 15 from Tk 186.44 billion in the previous quarter, according to the central bank latest statistics.

The estimate includes disbursement of fresh credit, rescheduling of term loans and fund release for balancing, modernisation, rehabilitation and expansion (BMRE) of industrial units.

"The disbursement of industrial loans was hampered seriously during the period under review because of political unrest that had also affected supply chain across the country," a senior official of the Bangladesh Bank (BB) told the FE Saturday.

He also said the industrial term credit disbursement witnessed a rising trend from beginning of the final quarter of the FY 15 following improvement of the country's overall political situation.

"We expect that the rising trend of industrial term credit disbursement would continue in the coming months if political stability continues," the BB official hoped.

The recovery of overall industrial loans also fell by nearly 12 per cent to Tk 105.21 billion in the Q3 of the FY 15 from Tk 119.23 billion three months ago, the BB data showed.

"Business expansion was almost halted in the Q3 of the FY 15 mainly due to political unrest," a senior official of a leading private commercial bank (PCB) told FE while explaining the main causes of falling disbursement of industrial loans.

He also said most of the businessmen had maintained a 'go-slow' policy during the period under review for minimising their risks.

Echoing the BB official, the private banker also said the upward trend of industrial loans disbursement would continue if the government ensures better supply of gas and electricity to industrial units.

The government is now trying to generate more power through establishing new plants to meet the growing demand for electricity across the country, he added.

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