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.
As new finance minister Abul Hassan Mahmood Ali gears up to place his first budget for FY25, the lack of good governance in the banking sector remains a widely discussed issue.
Mercantile Bank PLC used to emphasise corporate lending but now the private commercial lender plans to redirect the focus in order to bring the unbanked people under the financial system by providing more loans to small and medium enterprises, retail and agriculture, said its top executive.
Seven large borrowers, including AnonTex, Crescent, Ratanpur, and S Alam groups, account for 57 percent of the total default loans at Janata Bank, highlighting the risks lenders face if a handful of firms eat up most of the credit.
The interest rate of treasury bonds recently jumped to a 15-year high of 12.75 percent, indicating that government borrowing will become costlier in the months ahead.
The Bangladesh Bank has bypassed its own rules by approving the appointment of Mohammad Shah Alam Sarwar as the strategic adviser of IFIC Bank PLC.
Bangladesh should consider emerging markets that are growing at a healthy clip and offer growth opportunities to drive up exports instead of keep relying on traditional destinations, said Frederic Neumann, HSBC’s Chief Asia Economist and co-head of Global Research Asia.
The chief executives of at least three private commercial banks told The Daily Star that the BB had verbally allowed them to quote Tk 1 more than the exchange rate to collect US dollars amid the ongoing forex crunch.
ICB Islamic Bank, which took shape from the ruins of Oriental Bank in 2008, is now failing to repay the depositors’ money due to severe liquidity crisis, indicating a vulnerable situation of the lender.
Bangladesh’s foreign exchange reserves have been falling since September 2021 despite a series of government initiatives to reverse the trend.
Currently, the government is borrowing heavily from commercial banks using the tool as the central bank has suspended injecting fresh money into the economy to avoid fuelling inflation, which has stayed above 9 percent for the past 20 months.
