Staff Reporter :
Former Deputy Governor of Bangladesh Bank (BB) Khandker Ibrahim Khaled on Sunday has underscored the need for increasing the credit-flow in the rural areas with a view to reducing access liquidity from the banking sector.
More credit facilities in the rural areas would help create more job opportunities as well as boosting country’s economy, said the former deputy governor while addressing a round table discussion on “Excess Liquidity: How to Solve” in the auditorium of Bangladesh Institute of Bank Management (BIBM) in the city.
Major portion of the banking facilities are centered in Dhaka and Chittagong regions every year, he observed. “If we attain a sustainable economy, we must diversify the geographical locations for sanctioning banking loan”, he said.
Ibrahim Khaled called upon the banks to make a liaison with the micro-finance institutions (MFIs) for disbursing rural credit in a large scale. “We have lot of experienced MFIs, but they are suffering for inadequate fund”, he said.
He urged the government for prompt implementation of special economic zone for the business community. He also stressed on the reduction of political influence in approving large and project loans.
Addressing as the chief guest, the central bank Deputy Governor Abu Hena Mohd Razze Hassan said that the excess liquidity of the banking sector stood at Tk 1.15 crore as on June 30 this year. Bangladesh Bank is sincerely working for reducing excess liquidity from the banking sector.
Meanwhile, Prof and Director of BIBM Dr Prashanta Kumar Banerjee presented a key note where he said that the current excess liquidity of banks is a cause of concern for both policy makers and practitioners. The slowdown of advance may be due to poor investor confidence because of anarchy before and after the national election 2014. Moreover the tight lending practices by banks after a few scams have reduced the investment opportunities in the capital market. Excess liquidity of the state owned commercial banks was 28.20 per cent in the year 2014, followed by 12.80 per cent by private commercial banks, 34.90 per cent by foreign commercial banks and 1.20 per cent by specialized banks.
He suggested banks for undertaking infrastructure projects for reducing the current excess liquidity. There are enormous scopes of establishing some backward linkage industries for pharmaceuticals, electronic goods, automobiles, bi-cycle, motor cycle in the country. “These backward linkage industries may add more value for the economy through creating new entrepreneurs and enterprises. Banks can finance these organizations on a large scale”, he said.
Apart from continuation of urban financing, banks may consider credit- flow at a progressive rate in the rural areas covering traditionally un-served farm and nonfarm SMEs, suggested the BIBM director.
He suggested banks to finance large project under syndication and public-private-partnership. “Banks may give more attention to bridge financing, venture capital, cluster financing, leasing and club financing”, he also said.
Director General of BIBM Dr Toufic Ahmad Choudhury chaired the roundtable meeting.
Former Deputy Governor of Bangladesh Bank (BB) Khandker Ibrahim Khaled on Sunday has underscored the need for increasing the credit-flow in the rural areas with a view to reducing access liquidity from the banking sector.
More credit facilities in the rural areas would help create more job opportunities as well as boosting country’s economy, said the former deputy governor while addressing a round table discussion on “Excess Liquidity: How to Solve” in the auditorium of Bangladesh Institute of Bank Management (BIBM) in the city.
Major portion of the banking facilities are centered in Dhaka and Chittagong regions every year, he observed. “If we attain a sustainable economy, we must diversify the geographical locations for sanctioning banking loan”, he said.
Ibrahim Khaled called upon the banks to make a liaison with the micro-finance institutions (MFIs) for disbursing rural credit in a large scale. “We have lot of experienced MFIs, but they are suffering for inadequate fund”, he said.
He urged the government for prompt implementation of special economic zone for the business community. He also stressed on the reduction of political influence in approving large and project loans.
Addressing as the chief guest, the central bank Deputy Governor Abu Hena Mohd Razze Hassan said that the excess liquidity of the banking sector stood at Tk 1.15 crore as on June 30 this year. Bangladesh Bank is sincerely working for reducing excess liquidity from the banking sector.
Meanwhile, Prof and Director of BIBM Dr Prashanta Kumar Banerjee presented a key note where he said that the current excess liquidity of banks is a cause of concern for both policy makers and practitioners. The slowdown of advance may be due to poor investor confidence because of anarchy before and after the national election 2014. Moreover the tight lending practices by banks after a few scams have reduced the investment opportunities in the capital market. Excess liquidity of the state owned commercial banks was 28.20 per cent in the year 2014, followed by 12.80 per cent by private commercial banks, 34.90 per cent by foreign commercial banks and 1.20 per cent by specialized banks.
He suggested banks for undertaking infrastructure projects for reducing the current excess liquidity. There are enormous scopes of establishing some backward linkage industries for pharmaceuticals, electronic goods, automobiles, bi-cycle, motor cycle in the country. “These backward linkage industries may add more value for the economy through creating new entrepreneurs and enterprises. Banks can finance these organizations on a large scale”, he said.
Apart from continuation of urban financing, banks may consider credit- flow at a progressive rate in the rural areas covering traditionally un-served farm and nonfarm SMEs, suggested the BIBM director.
He suggested banks to finance large project under syndication and public-private-partnership. “Banks may give more attention to bridge financing, venture capital, cluster financing, leasing and club financing”, he also said.
Director General of BIBM Dr Toufic Ahmad Choudhury chaired the roundtable meeting.
