New gen PCBs not being able to open \\\'credit line arrangements\\\' for LC confirmation

Special Correspondent | Published: July 28, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

Md Rafiqul Islam

The new generation private commercial banks (PCBs) are not being able to open 'credit line arrangements' for LC confirmation because of non-cooperation from the foreign commercial banks (FCBs).
"Our export-import and other non-funded businesses are being affected as we cannot open required number of letter of credits against the import businesses due to lack of credit lines," Md Rafiqul Islam, managing director & CEO of South Bangla Agriculture & Commerce Bank Ltd (SBAC) told the FE in an interview recently.
He said FCBs are not opening Nostro Accounts in favour of the new PCBs giving a blow to the treasury and foreign exchange businesses of the new PCBs.
He said since all the new PCBs are doing banking businesses under the strict supervision of Bangladesh Bank, the FCBs should not show such disparity towards the new generation PCBs.
The SBAC MD in another plea urged the central bank to relax the existing urban-rural branch ratio as businesses in the rural areas are traditionally not brisk like the urban areas.
He said under the existing law, a bank has to open a new branch in rural area after opening a branch in urban areas though previously the ratio was 3:1.
SBAC has so far opened a total of 44 branches across the country.
"We have a plan to increase the branches to 50 by the end of December, 2015," the SBAC MD disclosed.
Replying to a question, the SBAC MD said the bank made 'robust business growth' in all operating areas in 2014 against 2013. Assets, deposits, loans & advances and earnings per share (EPS) rose 174.79 per cent, 319.88 per cent, 349.59 per cent and 44.45 per cent respectively in the year.
The new generation PCB earned operating profit of tk 318.42 million in 2014, a whopping 128.82 per cent up against the previous year.
The total capital of the bank stood at Tk 4,364.66 million as on December 31,2014 against the regulatory requirement of Tk 4000.00 million. The capital adequacy ratio is 29.54 against the required 10.0 as per Basel-Two.
He said the SBAC contributed Tk 103.61 million as tax, Tk 38.89 million as advance tax and Tk 40.60 million as value added tax (VAT) & excise duty to national exchequer in 2014.
Commenting on the growing competition among the new and old generation PCBs, the SBAC MD said the service quality and operating efficiency of the banks concerned will naturally be able to attract more businesses.
The total number of commercial banks operating in the country now stands at 56.
Commenting on green banking, he said SBAC has already formulated 'green finance policy' incorporating 47 green products duly approved by the board.
"Under the policy, the loan will be disbursed at flexible terms and subsidized interest rate as per Bangladesh Bank guidelines," Md Rafiqul Islam said.
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