Rupali Bank for raising credit growth

Rupali Bank Ltd management has put thrust on finding out good borrowers to properly utilise the loans sanctioned to the entrepreneurs.

"With rising cost of deposits and opening of new branches along with the recruitment of new human resources, there is no alternative to sanction loan but banks should find out the good borrowers," a senior official of Rupali Bank told The FE Thursday.    

According to Rupali Bank sources, the bank saw 14.90 percent credit growth in 2012 while 2010 and 2011 witnessed 15.71 per cent and 16.01 percent growths respectively.

But Bangladesh Bank ordered to reduce the credit growth rate to 10 percent from 15 percent in May, 2013. Later in September in the same year the central bank further reduced the credit growth to 2.50 percent.      

Experts opined it was not possible to keep the credit growth rate within 10 percent due to late decision of Bangladesh Bank.

"That's why our credit growth rate rose to 13 percent," a Rupali Bank source said.

Managing Director of Rupali Bank Limited, M. Farid Uddin said the total deposit of the bank is Tk. 177.95 billion (17795 crore) and loans and advances is Tk. 107.42 billion  (10742 crore). So credit deposit ratio (CDR) of the bank is 60.37 percent.

 "But it needs 81 percent CDR for operating day to day banking activities. That's why Rupali Bank needs to increase the credit growth," Mr Farid Uddin said.

He pointed out that in 2012 non-funded liabilities of some reputed customers' letter of credit (L/C) turned into funded liabilities for non-compliance. As a result, a forced loan amounting to Tk 7.08 billion (Tk.708 crore) has been created.

Forced loan and interest charged on general credits created the necessity of credit growth rate as well, he said.