Says not more than 2 of a family to be bank directors, slams media
Bangladesh Bank on Monday asked scheduled banks to decrease their rate of interest on industrial loans to ensure GDP growth by increasing inflow of credit to the productive sector.
The BB gave the direction at a ‘bankers meeting’ led by its governor Atiur Rahman at the central bank headquarters in the capital while managing directors and chief executive officers of all bank attended the programme.
The liquidity position in the banking sector is now satisfactory, so the higher interest rate on the industrial loan is not desirable, the BB governor said at the meeting.
‘It is important to decrease the rate of interest on industrial loans to achieve the desired GDP growth,’ he said.
BB deputy governor SK Sur Chowdhury after the meeting told reporters that representatives of the trade bodies, businessmen and economists had been demanding for long the central bank’s initiative in reducing the rate of interest on the industrial loans.
Banks are violating frequently the banking discipline in operating their credit and deposit accounts of the clients, Atiur said at the bankers meeting.
‘Banks do not inform their clients when they increase the interest rate against the clients’ accounts. Besides, they do not adjust the rate of interest on the clients’ accounts when the rate decreases,’ he said.
Banks will have to follow the rules and regulations properly in this regard, he said.
Loan defaulters usually bring court order for their defaulted loans to become regular clients in the report of Credit Information Bureau.
‘After taking court order, the defaulters take more loans from the banks. The practice is highly risky for the banking sector,’ Atiur said.
He said banks would have to take strong measure to settle the cases so that the defaulters would not be able to take loans from the banks.
The BB will take stern action against banks if they show relax attitude to settling the cases, he said.
‘From now on, at best two members of a family will keep their position in the board of directors of a bank as Bank Company Act (amended) 2013 has crossed one year today (Monday),’ he said.
Banks will have to follow the act accurately, he said.
The BB governor criticised the media role saying that they (newspaper and television) usually highlighted the negative news on the banking sector.
He claimed that the BB had done a number of good jobs in the last five years including ensuring a strengthened supervision system, but the media had not focused it.
‘It is not right to tarnish all good jobs due to only one or two corruptions. The BB will take punitive measures if any bank violates its credit discipline,’ he said.
BB governor asked the MDs and CEOs of the banks to fight against their respective boards if they (boards) give any pressure to perpetrate irregularities.
BB governor said, ‘The banking sector is now enjoying excess liquidity. But, Banks should not disburse loans in the unproductive and risky sector to gain profitability.’
SK Sur told reporters that the BB had asked Sonali Bank to settle all acceptance bills relating the Hallmark scam by September 2016.
Banks will have to impose the interest rate and service charge in accordance with their submitted statements to the central bank, he said.
Association of Bankers, Bangladesh president Ali Reza Iftekhar said that the defaulted loan was the key challenge for the banking sector.
‘We have to take initiative to reduce the non-performing loans at any cost as the classified loans will foil the capacity and reputation of a bank,’ he said.
-With New Age input
