Abu Sazzad :
Bangladesh Bank is going to form a special committee with a view to monitoring SME loan disbursement of the financial institutions (FIs). The bank has taken the decision to identify the disbursed SME loan whether it goes to the right sector or not, said the banking sources.
Already, the central bank has warned scheduled banks and non-banking financial institutions that it would take disciplinary action if they show their personal and consumer loans as small and medium enterprise loans in their SME loan reports.
In this regards, BB recently issued a letter to the managing directors and chief executive officers of all banks and NBFIs saying that some banks and NBFIs had recently showed personal and consumer loans as SME loans violating rules and regulations.
The BB letter said that it would take departmental action against the officials who would show personal and consumer loans as SME credit.
In this backdrop, the finance ministry had arranged a coordination meeting on August 18 with the chief executives of the state-owned banks where the ministry alleged that some banks had attached their personal and consumer loans to the SME category loans.
The ministry asked the state-owned banks to prepare a list of the officials who showed personal and consumer loans as SME loans.
The ministry has recently issued a letter to the central bank to take measures in this regard so that no bank or NBFI would be able to attach personal and consumer loans to SME loans, said a BB official on condition of anonymity.
As part of the move, the central bank issued the letter to the banks and NBFIs to warn them about the matter, he said.
The BB also asked the banks and NBFIs to organise training sessions for the officials who usually prepare the SME statements to submit to the central bank.
The BB official said, ‘SME loan disbursement by the banks and NBFIs increased abnormally in recent years. The central bank suspects that the banks and NBFIs attached other loans to the SME category credit heavily.’
According to the BB data, SME loan disbursement by the banks and NBFIs increased by 19.02 per cent to Tk 56,132 crore in the first six months of this year from that of Tk 47,160 crore in the January-June period of 2014.
Banks and NBFIs disbursed Tk 1,00,910.15 crore in SME loans in 2014 while the figure was Tk 85,323.25 crore in 2013.
Bangladesh Institute of Bank Management (BIBM) SME Consultant Sukumol Sinha Chowdhury said, the central bank has asked the financial institutions to distribute at least 10 per cent of their total credit portfolio to the SME sector across the country.
“Access to finance is one of the major problems for the SME entrepreneurs, so adequate SME loan disbursement is very important to attain a vibrant economy,” said Sukumol Sinha.
If any bank and non-bank financial institution show their retail credit in the name of SME credit, it will be an offence as per the banking act. Definitely, the central bank will take action against those financial institutions for violating banking rules and regulations.
Bangladesh Bank is going to form a special committee with a view to monitoring SME loan disbursement of the financial institutions (FIs). The bank has taken the decision to identify the disbursed SME loan whether it goes to the right sector or not, said the banking sources.
Already, the central bank has warned scheduled banks and non-banking financial institutions that it would take disciplinary action if they show their personal and consumer loans as small and medium enterprise loans in their SME loan reports.
In this regards, BB recently issued a letter to the managing directors and chief executive officers of all banks and NBFIs saying that some banks and NBFIs had recently showed personal and consumer loans as SME loans violating rules and regulations.
The BB letter said that it would take departmental action against the officials who would show personal and consumer loans as SME credit.
In this backdrop, the finance ministry had arranged a coordination meeting on August 18 with the chief executives of the state-owned banks where the ministry alleged that some banks had attached their personal and consumer loans to the SME category loans.
The ministry asked the state-owned banks to prepare a list of the officials who showed personal and consumer loans as SME loans.
The ministry has recently issued a letter to the central bank to take measures in this regard so that no bank or NBFI would be able to attach personal and consumer loans to SME loans, said a BB official on condition of anonymity.
As part of the move, the central bank issued the letter to the banks and NBFIs to warn them about the matter, he said.
The BB also asked the banks and NBFIs to organise training sessions for the officials who usually prepare the SME statements to submit to the central bank.
The BB official said, ‘SME loan disbursement by the banks and NBFIs increased abnormally in recent years. The central bank suspects that the banks and NBFIs attached other loans to the SME category credit heavily.’
According to the BB data, SME loan disbursement by the banks and NBFIs increased by 19.02 per cent to Tk 56,132 crore in the first six months of this year from that of Tk 47,160 crore in the January-June period of 2014.
Banks and NBFIs disbursed Tk 1,00,910.15 crore in SME loans in 2014 while the figure was Tk 85,323.25 crore in 2013.
Bangladesh Institute of Bank Management (BIBM) SME Consultant Sukumol Sinha Chowdhury said, the central bank has asked the financial institutions to distribute at least 10 per cent of their total credit portfolio to the SME sector across the country.
“Access to finance is one of the major problems for the SME entrepreneurs, so adequate SME loan disbursement is very important to attain a vibrant economy,” said Sukumol Sinha.
If any bank and non-bank financial institution show their retail credit in the name of SME credit, it will be an offence as per the banking act. Definitely, the central bank will take action against those financial institutions for violating banking rules and regulations.
