Banking sector performs better in 2017
The overall situation in the banking sector in the outgoing year 2017 was good as Bangladesh Bank (BB) strictly maintained its supervision activities and took several steps against irregularities of some commercial banks.
In the outgoing year, the banks' default loans increased due to the indiscipline in the lending by the some commercial banks. In this regard, BB took actions against some commercial banks, including Farmers Bank Limited and NRB Commercial Bank, and removed top executives of the banks' boards.
"Through the steps, BB tried to create good governance in the banking sector and it has achieved successes in different aspects," BB Deputy Governor Abu Hena Mohammad Razee Hassan told BSS.
He said the banking sector was stable in the year as all major indicators including deposit, advance, foreign exchange reserve, exchange rate, export and import, inflation and private sector credit growth were satisfactory.
According to the central bank, from October 2016 to October 2017, the deposit and loan amount both sharply increased from 10.48 percent and 13.55 percent respectively. During the period, deposit was Taka 9.06 lakh crore and loan Taka 9.77 lakh crore. But in September, classified loan was 10.67 percent while it was 10.34 per cent in December, 2016.
"The percentage of classified loan is increasing and for this, the banks could not recover the reschedule loan," Hassan said.
From July to October in 2017, import increased by 28.71 percent to $18,526.60 million while export increased by only 6.86 percent to $14,562.91 million in July to November period.
The reserve also was over $32 billion in 2017, which was enough for meeting the country's nine months' import cost.
The inflow of remittance witnessed a sharp rise in the last couple of months in 2017 with $5768.54 million in July -November period in the year which was 10.76 percent higher than the corresponding period in the previous year when the amount was 5,208.12 million.
"Due to steps taken by the central bank, the inflow of remittance in the last couple of months in the year was upward as the non-residence Bangladeshis (NRBs) are sending money through the legal channel," said Razee Hasan.
He said BB has already achieved 40.35 percent of its agriculture loan distribution target as the banks have already distributed Taka 8,230.88 crore out of Taka 20,400 crore in the first five month in the fiscal 2017-18.
"The money flow in all sectors including Small and Medium Enterprises (SMEs) and agriculture and non-farm rural sector has increased significantly." he added.
Razee Hasan said the central bank is now working on agent banking and green banking to make the economy further vibrant to help the country achieve the middle income status.
He said school banking is getting huge response among the students across the country as deposits with the banking accounts have crossed Taka 1,200 crore at the end of September 2017.
Over 13 lakh accounts have been opened under the school banking till September this year, he added. -BSS