Banks under huge pressure to disburse stimulus loans
The Bangladesh Bank (BB) is bringing banks to complete the disbursement of Tk 20,000 crore stimulus loans meant for cottage, micro, small and medium entrepreneurs (CMSMEs) by August this year.
Reluctance of majority of banks to give credit to CMSMEs is the reason for BB's move to force banks to complete the process, senior central bank officials told The Daily Observer on Monday. BB on June 21 issued a letter to all scheduled banks in this respect to submit loan plans for CMSMEs.
In the letter, the central bank has asked all banks to make loan disbursement process easier as much as possible and complete the disbursement of Tk 20,000 crore in two months. The banks were asked to prepare their action plans outlining how they would be able to complete the disbursement of the allocated loans in two months.
Following the letter, only 18 banks submitted their action plans by June 25, the last date for submission of the plan to BB. It reflects the banks' reluctance to issue credit to small enterprises.
The central bank on Sunday issued another letter to banks, which did not submit the loan plan within the timeframe, asking them to explain their failure. The BB official also said that the central bank would take measures against banks reluctant to give credit to CMSMEs.
On implementation of Tk 30,000 crore stimulus loans for industries and services sectors, the BB has asked banks to set up help desk to expedite the processing of application for loan worth more than Tk 100 crore.
To support businesses to fight the fallout of coronavirus, the government has so far announced Tk 1.03 lakh crore in stimulus packages including two packages mainly based on bank loans
Of the packages, Tk 20,000 crore loan package is meant for the CMSMEs. This loan would be 9 per cent interest bearing; of which the government would provide 5 percent as subsidy for one year. The the borrower will pay the remaining 4 percent.
Another Tk 30,000 crore stimulus loans are designed for industries and service sectors for which the where the government would pay half of the 9 percent interest as subsidy, borrower would pay the rest. As of June 25, the BB has approved around Tk 3,000 crore loan proposals of 140 entities, which were placed by different banks for approval.
City Bank received approval of around Tk 300 crore against its proposal for Tk 1.023 crore, while Eastern Bank received approval of Tk 427 crore against its proposal for Tk 981 crore.
Besides, approval for another Tk 2,000 crore in stimulus loans was underway. Speaking about Tk 30,000 crore in stimulus package, the BB official said the central bank has planned to implement the package by September this year.
FBCCI President Fazle Fahim on Sunday expressed its dissatisfaction over delay in disbursement of the stimulus loans and urged the government to withdraw deposits of the state-owned enterprises from the banks which were not implementing the package.