After a five-month pause, dollar rates have started to rise, prompting the central bank to question the managing directors of 13 banks about the fresh volatility of the greenback.
BB issued letters on Dec 19 and the deadline for explanation ends today
As much as 89.3 percent of the credit extended by First Security Islami Bank, when controlled by the major Awami League beneficiary S Alam Group, to AL-affiliated Sikder Group by violating banking rules and regulations has become defaulted.
Problem-ridden Padma Bank has applied to the Bangladesh Bank for Tk 1,300 crore in liquidity support to mitigate its crisis and strengthen its ability to repay depositors.
Defaulted loans at six private commercial banks nearly tripled in one year till September 2024, according to central bank data, which bankers term “alarming”.
State-run Janata Bank has been partly exempted from the Bank Companies Act-1991 so that it can lend money to Beximco Group, a loan defaulter.
Consumer financing has slowed as people are adopting a go-slow strategy for taking loans, considering the increasing trend of interest rates amid ongoing inflationary pressure.
Motijheel is losing its historic lustre as Dhaka’s commercial hub, with Gulshan, among the wealthiest neighbourhoods in the capital, stealing its thunder.
There is hope that the major challenges Bangladesh is facing due to high inflation and the foreign reserve crisis will stabilise gradually in fiscal year 2024-25, but consistency in maintaining a strict policy stance will be imperative to that end.
At the beginning of fiscal year 2023-24, there was an expectation that the country’s economy would recover from the shocks of the Covid-19 pandemic and other external pressures.
Small and medium enterprises (SMEs) are considered risky clients by most formal sector lenders since their financial health is weak and they are not good at managing risks and are expensive to lend. However, BRAC Bank has a different story to tell.
Banks in Bangladesh are increasing their investments in Treasury bills and bonds to net higher profits from the rising interest rate, a development that has squeezed the availability of loans for borrowers.
Bangladesh’s foreign currency reserves are set to receive as high as $2 billion this month, which may send the total to nearly $21 billion, handing a much-needed relief to the US dollar supply.
The services have received lukewarm responses from the targeted customers because they were launched hastily and lack user-friendly features and campaigns were not run to make them popular. Besides, there is no incentive and banks are unwilling, industry insiders said.
These credit bureaus will work to determine credit standards by analysing borrower data before sharing it with banks, which will help financial institutions make informed decisions, said the central bank guidelines on the licencing, operating and regulating of credit bureaus.
However, NPLs rose 38.5 percent year-on-year to Tk 1,82,295 crore by the end of March, accounting for 11.11 percent of the total loans disbursed in the banking system, according to central bank data.
Default loans in the banking sector of Bangladesh hit an all-time high of Tk 182,295 crore, but no reform programme to reduce it has been announced in the budget for the upcoming fiscal year.
Bad loans rose by Tk 36,367 crore in just three months
