AKM Zamir Uddin

Bangladesh Bank yesterday decided not to mop up any money from the market as a part of its efforts to ease the ongoing liquidity crunch in the banking sector.

Private sector credit growth in Bangladesh accelerated to 9.44 per cent in October, the highest in 13 months as the economy is running in full swing, shaking off coronavirus fallout.

Eleven banks faced a capital shortfall of Tk 27,918 crore in September, which exposed their fragile health.

Spending through credit cards maintained an upward trend in September as people kept flocking to online sites in the tourism and hospitality sector as the coronavirus crisis continues to wane.

Non-bank financial institutions have demanded postponement of the application of a Bangladesh Bank guideline that is seeking to restore credit discipline in the fragile sector.

Banking services are set to come even closer to clients in Bangladesh as Bank Asia plans to roll out voice banking, allowing its clients to carry out transactions through conversation.

The provision base of banks in Bangladesh deteriorated further in the third quarter of 2021 because of an increase in bad loans, highlighting the worsening health of the banking industry.

Remittance flow into Bangladesh will turn around in the long term helped by the rapid expansion of fin-tech-based companies despite the ongoing hiccups facing the key source of foreign currency for the country.

In an upsetting development, default loans in the banking sector in Bangladesh have surpassed Tk 1 lakh crore after more than one and a half years despite a relaxed loan classification policy adopted by the central bank.

The tale of the excess liquidity in Bangladesh’s banking sector does not paint the true picture as the majority of the additional fund is concentrated to a few lenders.

Bangladeshi currency taka will face more depreciatory pressures against the US dollar mainly due to imported inflation, according to a report released by Fitch Solutions.

Bangladesh Bank has asked Sonali Bank to explain why the state lender should not face a penalty for its overexposure in the capital market.

In an ominous sign, the central bank has flouted its own rules when it permitted Aviva Finance Ltd to open five more branches although the financial health of the non-bank financial institution has been in a bad shape.

Up until July this year, firms had been able to borrow at unprecedented lower interest rates as the cost of funds declined amid business slowdown. 

The country’s foreign exchange reserve has declined to $45.06 billion, mainly due to high import payments and a downward trend of remittances.

Banks in Bangladesh are less keen on giving out loans under the second round of stimulus packages as many clients are in trouble to pay off their current debts, a development that may hurt the economic recovery.

The Bangladesh Bank yesterday ordered Union Capital Ltd not to disburse any loans exceeding Tk 1 crore after the non-bank financial institution repeatedly failed to repay depositors despite their funds reaching maturity.

The flow of remittance to Bangladesh shrank further in October as money transfers through informal channels such as hundi might have returned with the ease of pandemic restrictions.

The flow of remittance to Bangladesh shrank further in October as money transfers through informal channels such as hundi might have returned with the ease of pandemic restrictions. Expatriate Bangladeshis sent $1.65 billion in October, down 4.6 per cent from one month earlier and 21.7 per cent year-on-year, according to data from Bangladesh Bank.

Banks will come under a liquidity crunch within three to six months due to an escalation of import financing and a rising demand for loans from businesses as the economy returns to normalcy, warned several top executives yesterday.