Only 20pc banks disburse loan to new industries

FT ONLINE

Only 20 percent of the banks disbursed loans to new industries in 2018 while the remaining 80 percent provided money for old businesses, said a Bangladesh Institute of Bank Management (BIBM) study.

The report was unveiled at the "8th Annual Banking Conference 2019" held on the BIBM premises on Wednesday.

The ongoing liquidity crisis has left an adverse impact on the disbursement of firm loans. The study described the situation as a negative attitude of the banks' credit policy.

It also suggested the banks to come out of the situation immediately to retain the fast economic growth.

The study also showed that the agricultural sector credit fell by nine percent on a year-on-year basis.

Governor of the Bangladesh Bank Fazle Kabir termed the commercial banks' attitude unfortunate and said, "The polarisation of loan disbursement to the new industries is not a good practice at all for the banking sector and the economy as well."

"The private sector's credit growth is in decline and well below the targets. We need to enhance exposure," he added.

Kabir also requested chief operating officers of the commercial banks to find a way out of the situation.