Dhaka Times Report. Scheduled banks are disbursing loans without regard to rules and regulations. This allegation has been raised against the country's 16 scheduled banks.
Complaints have been received that 16 scheduled banks of the country are disbursing loans irregularly. These banks are not following the rules of the central bank. The central bank held a meeting with the top executives of such banks on May 28. In the meeting, the concerned banks have been instructed to bring down the fixed rate of loan deposit (credit deposit ratio) by next June. The meeting was held under the chairmanship of Central Bank Deputy Governor SK Sur Chowdhury. In the meeting, the central bank's offsite supervision is currently expected to keep the loan-to-deposit ratio within 85 percent for commercial banks. Earlier it was 82 percent for commercial banks and 88.5 percent for Islamic banks. It was ordered to reduce it in March last year. The central bank fixes the loan deposit rate to reduce the gap between loan disbursement and deposit collection, consolidate the liability-asset management of banks and reduce the growth of loans. As a result it is also done as a strategy to reduce inflation.
When asked about the meeting, SK Sur Chowdhury said that the banks which are disbursing loans beyond the prescribed limits have been warned so that they keep the loan and deposit rates as per the rules set by the central bank. For this, they have been given one month's time. Banks that fail to do so within the specified time will be subject to disciplinary action. He said that there has been some liquidity crisis in the banking sector as a result of some banks disbursing more loans. He said that if the loan deposit rate is not properly observed, on the one hand, bank depositors are at risk, on the other hand, problems arise in the banking sector.
According to the central bank's latest figures till April, some banks have disbursed up to 206 per cent of loans. Two banks operating in the private sector have disbursed loans as per norms. Besides, the loan disbursement of all the remaining banks is below the legal limit. However, the overall loan disbursement and deposit collection gap of the banks is less. In this case, Islamic banks have disbursed loans of 90.89 percent and CDR ratio of non-Islamic banks is 8.23 percent. Banks have an overall loan and deposit ratio of 80.67 percent.
At the end of April, foreign-owned Hong Kong and Shanghai Bank Corporation (HSBC) posted the highest growth in loan disbursements. The loan growth of this bank is 249 percent. State sector Agrani Bank's loan disbursement growth rate is 206 percent. It is followed by the private sector operated The City Bank. The loan growth of this bank is 159 percent. The government-owned specialized Bangladesh Development Bank Limited (BDBL) is at the third position in terms of loan disbursement growth. The loan growth of this bank is 135 percent. The loan growth of ICB Islami Bank stands at 120 percent. The loan growth rate of National Bank of Pakistan during the said period is 116 percent. In addition, the remaining 10 banks have increased their loans beyond the limit, but their loan growth is below 100 percent.
Among the specialized banks, Rajshahi Krishi Unyan Bank (Raqab) of Northern Region lags behind in terms of loan growth. So far the loan growth of this bank is 73 percent. Among foreign-owned banks, Al-Falah Bank has the lowest loan growth. The loan growth of this bank is 70 percent. According to the rules, the bank can disburse 15 percent more loans.
At the end of April, the loan-deposit ratio of private banks averaged 83.76 percent. 74.71 percent of state-owned banks, 80.59 percent of foreign-owned banks and 82.13 percent of specialized banks.
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