Friday, April 20, 2018 | ePaper

Pvt sector credit growth raises significantly

  • Print
Anisul Islam Noor :
Private sector credit growth increased significantly in April on the back of higher investment in government's infrastructure projects amid lower interest rate.
According to a data of Bangladesh Bank (BB), the overall excess liquidity with the commercial banks decreased by nearly 19 per cent or Tk 230 billion in April from a level it was four months ago. It means accelerated credit growth, particularly in the private sector.
It stood at Tk 1.0 trillion in the last week of April, falling from Tk 1.23 trillion as on December 31 last year, showed the BB statistics.
"The amount of excess liquidity has dropped recently mainly due to a higher private sector credit growth," a senior official of the Central Bank said.
Lower lending rates might have encouraged the businessmen and individuals to borrow more from the banks to meet their demand for funds, he explained.
The weighted average interest rate on lending fell to 9.62 per cent in April from 9.70 per cent in the previous month while the weighted average interest rate on deposits came down to 4.97 per cent from 5.01 per cent.
He said consumer credits recently witnessed significant rise due to the lower rates.
Another BB official said the government's negative borrowing from the banking system has also contributed in reducing the liquidity in the money market.
"Most of the excess liquidity has already been invested in the government-approved securities and BB bills as a risk-free investment," he added.
Besides, excess reserve, generally known as excess over daily minimum cash reserve requirement (CRR) with the central bank, came down to Tk 420 billion during the period under review from Tk 450 billion, said the central bank official.
"We expect that the falling trend of excess liquidity will continue in the coming months if the present trend of private sector credit growth persists," he noted.
Meanwhile, private sector credit growth increased further in April due to higher trade financing for settling import payment obligations, some bankers said.
It rose to 16.21 per cent in April, which was close to the BB set target, from 16.06 per cent in March.. It was 15.88 per cent in February, according to the BB figures.
The monetary policy for the January-June period of the out fiscal year had set the private sector credit growth target at 16.50 per cent.
"Consumer financing, SME and agriculture loans have pushed up the overall private sector credit growth during the period under review," said an executive of a leading private commercial bank.
He said the upward trend of private sector credit might continue in the coming months following implementation of different infrastructures along with mega projects in the country.
Currently, the government is implementing nine projects under its Fast Track Project Monitoring Committee, headed by Prime Minister Sheikh Hasina.

More News For this Category

DU to showcause 26 for 'harassing' Esha

Staff Reporter :In an unexpected turn of events the Dhaka University administration has decided to  issue show cause notices against 26 residential students of Kabi Sufia Kamal Hall for

Hasina is on the 2018 TIME 100 list

Jago News Desk :Three-time Prime Minister Sheikh Hasina is on the list of  2018  TIME magazine world's most influential people published on Thursday.U.S president Donald Trump, Japanese Premier Shinzo

UK AL demands Tarique's extradition

bdnews24.com :A day after Sheikh Hasina said her government is trying to negotiate the extradition of Tarique Rahman, the UK chapter of the Awami League has demanded that the

Restricting ship movements in Sundarbans river routes urged

UNB, Dhaka :Speakers at a roundtable in the city have called for making the river routes in Sundarbans off limit for the ships carrying oil, chemical, coal and harmful

Man shot dead by 'robbers' in Sylhet

UNB, Sylhet :A man was shot to death allegedly by some robbers at Chotodesh village in Kanaighat upazila early Thursday.The deceased was identified as Ifzal Uddin, 45, son of

Assad steps up efforts to crush last besieged enclaves

Reuters, Beirut/Amman :The Syrian government stepped up its efforts on Thursday to retake the opposition's last besieged enclaves, as rebels prepared to withdraw from one and a newspaper reported

PM clears 13 urgent files from UK

UNB, London :Prime Minister Sheikh Hasina, who is now in London to join the 25th Commonwealth Heads of Government Meeting (CHOGM), has cleared 13 urgent files digitally."Despite her busy

Editors' concern over proposals logical: Anisul

UNB, Dhaka :Describing the Editors' Council's concern over some sections of the proposed Digital Security Act as logical Law Minister Anisul Huq on Thursday assured that steps will be

2,000 Kachin trapped by Myanmar fighting lack food, medicine

2,000 Kachin trapped by Myanmar fighting lack food, medicine

AP, Bangkok :Community leaders from the Christian ethnic Kachin community have called for urgent medical attention for about 2,000 civilians, including pregnant women and the elderly, trapped in the

EC works for expats' rights to vote

Staff Reporter :Chief Election Commissioner K M Nurul Huda said, EC is working for the expatriates' rights to vote in the coming National Polls.  To ensure the immigrants' voting