The state-owned commercial banks continued to borrow from the call money market in the first seven months of the current year though liquidity pressure in the market eased.
An official of the debt management department of the central bank told New Age that private and foreign commercial banks and non-bank financial institutions had reduced their dependence on the call money market from the beginning of this year, but the state-owned banks kept on borrowing from the market.
Call money market is an inter-bank trading system from where the banks and NBFIs borrow or lend money for a short term.
The official said the state-owned banks had been borrowing a large amount of money from the call money market since 2011, but they increased their borrowing more at the beginning of July.
Among all the commercial banks and the NBFIs, Sonali Bank topped the list of borrowers by taking Tk 79,462 crore from the call money market from January 1 to July 19, BB data showed.
The bank lent only Tk 3,461 crore through the call money market in the period.
In 2011, Sonali Bank had borrowed Tk 33,397 crore from the call money market, while it lent Tk 55,154 crore, the BB data showed.
Agrani Bank was the second highest borrower till July 19 this year. The bank borrowed Tk 75,950 crore and lent only Tk 60 crore in the period.
The BB data showed that the liquidity crisis in the bank had also persisted in 2011, as it had borrowed Tk 1,56,825 crore from the call money market and lent only Tk 4,533 crore.
From January 1 to July 19 this year, Janata Bank borrowed Tk 43,319 crore and lent Tk 20,515 crore.
BB data showed Janata Bank had lent a significant amount of money to the call money market in the first two months of the current year, but after the period the bank continued to borrow till July.
Rupali Bank was comparatively better in terms of borrowing from the call money market. The bank borrowed only Tk 140 crore and lent Tk 41,559 crore in the period.
The call money rate — the interest rate at which a bank or an NBFI gives short-term loan to other banks and NBFIs — fluctuated between 9 per cent and 11 per cent last week, according to BB data.
Another BB official said that allegations had recently emerged that the state-owned banks disbursed loans with the funds borrowed from the call money market.
Moreover, most of those banks were now grappling with a severe liquidity shortage because of high government borrowings from the banking source.
Officials said the government had been borrowing from the primary dealer banks to meet its day to day expenses.
Besides, the government is in a tight position because of low disbursement of foreign loans and grants from the previous 2011, they said.
A senior official of a state-owned bank said that the three banks had bought treasury bills and bonds on mandatory basis to facilitate the government borrowing.
These bonds have turned into idle assets due to absence of a vibrant secondary bond market in the country.
He said, ‘The banking sector has been facing a crisis from the previous year for low deposit collection. As a result, the liquidity pressure on the state-owned banks has become worse.’
The pressure would ease if the government reduces its borrowing from the banking source, he said.
-With New Age input
