Staff Reporter :
The government has planned to implement lion portion of the stimulus package through state-owned banks considering their sound liquidity position and countrywide network.
Sources said, the finance ministry arranged a virtual discussion with the managing directors of all the public banks on Thursday to explore ways to implement the stimulus packages that the government announced to offset economic fallout caused by the nationwide coronavirus shutdown.
Financial Institutions Division Secretary under the Ministry of Finance Md Ashadul Islam presided over the meeting.
“The issue was discussed at the virtual meeting,” Janata Bank Managing Director Abdus Salam Azad told The New Nation.
He said the Finance Ministry is keen to implement eighty per cent of the stimulus package through the state lenders as they had branches across the country and strong liquidity base.
The meeting also discussed the state-run banks’ losses due to suspension of interest of two-months. Besides, the finance ministry instructed state banks to reduce their operating costs.
Earlier, the government and Bangladesh Bank announced Tk 95,619 crore stimulus package to tackle the ongoing economic fallout due to pandemic coronavirus.
Agrani Bank Managing Director Mohammad Shams-Ul Islam said, most of the private commercial banks are now in liquidity crisis amid huge cash withdrawal pressure.
On the other hand, liquidity position of the state run banks was better than private banks. As a result, the government preferred state-owned banks to implement lion portion of the stimulus package, said Mohammad Shams-Ul Islam said director.
As per central bank data, the country’s 59 banks have 10,467 branches across the country. Of them, four state-owned banks Sonali, Janata, Agrani and Rupali- together account for 34 per cent of the branches, and 56 per cent of such branches are located in the rural areas.
