No more re-financing to SCBs: Kamal | 2019-08-26

No more re-financing to SCBs: Kamal

Staff Correspondent

26 August, 2019 12:00 AM printer

No more re-financing to SCBs: Kamal

Finance Minister AHM Mustafa Kamal on Sunday vehemently said that the government won’t re-finance state-owned commercial banks (SCBs) anymore to meet their capital shortfall.

“From now on no more refinancing will be done for the state-owned commercial banks, even though we’ve this in past year. Now that is off. This is now the story of the past,” Kamal said after he met CEOs of state-owned banks. 

“These banks will have to earn their money and pay taxes to the government. This is the final decision,” said the determined minister.

The finance minister was briefing reporters after holding a meeting with the new top management of the four state owned commercial banks (SCBs) namely Sonali, Rupali, Agrani and Janata  at the NEC 2 auditorium in the capital yesterday.

Bangladesh Bank Governor Fazle Kabir, Finance Division Secretary Abdur Rauf Talukdar and Financial Institution Division Secretary Md Ashadul Islam were also present in the meeting.

The finance minister said these four banks have been given some time to submit their work plan before him and they would sit again on next Sunday to further discuss on their work plans.

With regard to rising Non Performing Loan (NPL), Kamal claimed that bad loans are on the rise as the government could not execute its exit plan offered to loan defaulters because of the High Court’s intervention.   

“We hope the matter will be resolved soon, then you will get a clear picture of the banking sector and the exact amount of the NPL,” he added.

Kamal also claimed that if the ‘exit plan’ is properly executed, NPL would come down to a huge extent while the scenario of the country’s trade and commerce would change a lot.

He said once the writ filed with the High Court regarding NPL is settled, a new circular would be issued giving fresh timeframe to the defaulters to pay off their loans utilizing the exit plan.

The finance minister also said he had suggested the SCBs to pay attention to NPL issue so that it does not increase further.

He asked the SCBs to continue efforts to make at least 15 percent profit per year to utilise their resources properly, and check out security before providing loans.

Kamal said the new top managements of the SCBs  are very much skilled and if they can run their banks with their knowledge and experiences in line with local and global context, the country can expect much better in the coming years.

He said that the role and performance of these banks are also important as they are around 25 percent of the country’s banking sector.

Ruling out the media report that there is liquidity crisis in the country, Kamal said as of Sunday, there was access liquidity of around Tk 92,000 crore and it could be used and invested further.

He also trashed media reports that the country’s export earnings would decline in the coming years saying that these are false reports.

In this regard, Kamal said Bangladesh was not affected during the economic recession which hit the South East Asia in 1997 and also during the global economic recession in 2007-08.

Referring to the recent growth projection of the International Monetary Fund (IMF), Kamal said the IMF has acknowledged the government’s growth estimation of last year and also projected a healthy growth projection in the current fiscal year.

“We believe if we can maintain this growth momentum, the growth will not reach below 8 percent in the coming years,” he insisted.

Kamal said the country would start getting the benefits of large infrastructural investments in the coming years. He also assured that there is no reason for getting apprehended regarding the country’s economy now.

 


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