BB doubles banks' lending capacity
Loan giving capacity of the four state-owned banks (SOBs) has been doubled so that investment situation in Bangladesh improves despite the global economic meltdown.
Bangladesh Bank (BB) at a meeting with the SOBs yesterday also increased by five percent their capacity to provide loan to a single borrower.
Governor of the central bank Dr Salehuddin Ahmed chaired the meeting.
BB Deputy Governor Murshid Kuli Khan told this correspondent that loan giving capacity of the four big banks has been enhanced so that no negative impact of the global recession is felt in Bangladesh.
He also said to increase these banks' capacity to give more loans to genuine borrowers, their 'single borrower exposure limit' has also been raised. "As a result, we hope that large and medium industries will expand further and generate more employment."
Lending rate in the banks in Bangladesh is higher than that in other countries. Moreover, lending rate rose by 2.19 percentage points in July-December period of the current fiscal year. Business community says it is impossible to do business taking loan from banks at such high rate of interest, and it is difficult to repay the loan.
A high official of the central bank admitted that lending rate in Bangladesh is excessive. "We are trying to bring it down and our efforts will continue,'' he added.
According to the memorandum of understanding (MoU) of the central bank with the SOBs-- Sonali, Janata, Agrani and Rupali banks-- growth of their loans and advances in a fiscal year cannot exceed five per cent.
At yesterday's meeting, the growth limit has been raised to 10 per cent.
In the credit market, the four SOBs' share is about 25 per cent. As a result of increase of the growth limit, they will be able to provide loans of around Tk 6,000 crore this fiscal year.
Due to the increased single borrower exposure limit, Sonali Bank would be able to give loan of up to 10 per cent of the paid up capital to a single borrower instead of five per cent. It can from now on give Tk 90 crore to a single borrower in place of Tk 45 crore previously.
Janata Bank and Agrani Bank from now on can provide loan of up to 20 per cent of the paid up capital to a single borrower instead of 15 per cent previously. Janata can now give Tk 52 crore to a single borrower as against Tk 39 crore previously. Agrani would be able to give Tk 50 crore to a single borrower instead of Tk 38 crore previously.
Rupali Bank from now on can give loan of up to 25 per cent of the paid up capital to a single borrower instead of 20 per cent. It would be able to give Tk 31 crore to a single borrower.