BB asks banks to set annual target of minimum Tk 5cr
Twelve scheduled banks and one non-bank financial institution are yet to disburse any loan under a Tk 200-crore refinancing scheme for green products after signing participant agreements with Bangladesh Bank three to four years before.
Twenty-eight banks and one NBFI have so far signed the agreements with the BB under the refinance scheme although the central bank asked all banks and NBFIs to join in the programme.
In this situation, the BB on Sunday at a meeting with all scheduled banks asked the banks to set a loan disbursement target of at least Tk 5 crore a year under the refinance scheme, a BB official told New Age.
BB deputy governor SK Sur Chowdhury presided over the meeting held at the central bank’s headquarters in the capital while managing directors and deputy managing directors of the scheduled banks attended.
The BB launched the scheme in August 2009 in a bid to attract green and environment-friendly projects like solar home systems, bio-gas plants and industrial effluent treatment plants.
The BB official said that 16 banks had borrowed only Tk 112.45 crore from the central bank’s revolving fund in the last four years as the banks found the interest rate set by the BB ‘not lucrative enough’.
Under the scheme, banks and NBFIs can get loans at five per cent interest from the central bank and can charge a maximum 10 per cent interest on the loans given directly to their customers for the green projects.
But if a bank or an NBFI gives the loans to the non-government organisations for the green products, clients will get the loans from the NGOs at up to 11 to 12 per cent interest.
According to a BB report, the 12 banks and one NBFI which have not so far disbursed any loan under the scheme are NCC Bank, Dutch-Bangla Bank, The City Bank, BRAC Bank, Mercantile Bank, Premier Bank, Jamuna Bank, Bangladesh Krishi Bank, Bank Asia, Rupali Bank, Janata Bank, Agrani Bank, and Industrial and Infrastructure Development Finance Company.
Earlier, the BB asked all banks but Islamic banks to sign participant agreement with the central bank under the scheme, the BB official said.
The 10 banks which have not signed the agreement so far are Standard Chartered Bank, United Commercial Bank, National Bank of Pakistan, Woori Bank, HSBC, State Bank of India, Bangladesh Development Bank, Citibank NA, Pubali Bank and Habib Bank.
The Sharia-based Islamic banks cannot participate in the traditional banking due to interest rate-oriented business.
The BB official said the banks at Sunday’s meeting had assured the BB that they would set an annual loan disbursement target of at least Tk 5 crore for green products.
‘Besides, the 10 banks which have not signed the agreements promised that they would sign the participant agreement,’ he said.
SK Sur said the BB would show special consideration for the banks which would ensure disbursement of the loans under the scheme in giving permission for opening new branch, authorised dealer branch and foreign exchange house.
The BB will consider the rate of success of the banks in disbursing green fund when it will make CAMELS rating, he said.
He also said that successful banks would get priority in getting special liquidity support from the central bank.
Another BB official said that the central bank at Sunday’s meeting had also reviewed the banks’ performances in disbursing loans under another refinancing scheme ‘financing brick kiln efficiency improvement project’.
The BB introduced the refinance scheme on September 16, 2012 with a support of Tk 400 crore from the Asian Development Bank.
Fourteen banks and six NBFIs have so far signed participant agreements with the BB under the refinance scheme.
The ADB provided the support to the government for reducing greenhouse gas emission and particulate pollution from brick fields in the country and building environment-friendly brick field through efficiency development of brick kiln with appropriate use of energy, the official said.
The BB will arrange a meeting with NBFIs today to discuss the issues.
-With New Age input
