Interest rate target-based monetary policy from June
The Bangladesh Bank has made a policy decision to introduce an interest rate target-based monetary policy partially in the next monetary policy to be announced in June as per the suggestion of the International Monetary Fund (IMF). With this interest rate target, the central bank will manage inflation following the monetary policy model that India follows, said a senior executive of the central bank. A committee has been formed comprising a group of Bangladesh Bank officials who will visit India to gain hands-on experience from The Reserve Bank of India under the capacity development project of the IMF, he said. The IMF has set the condition for the Bangladesh Bank to go for a flexible interest rate-based monetary policy as part of its $4.7 billion loan approved for the country in February. At present, the Bangladesh Bank follows a money supply target-based monetary policy model which failed to tame inflation as the money supply is not the cause of the current price pressure but it has been fuelled by external factors and energy price adjustment.
Latin-Bangladesh sign deal with BIDA to open new door for trade, investment
Latin America-Bangladesh Chamber of Commerce & Industry (LABCCI) signed a Memorandum of Understanding (MoU) with Bangladesh Investment Development Authority (BIDA) at its office at Agargaon area in Dhaka on Wednesday. Executive Chairman of BIDA, Lokman Hossain Miah, Senior Secretary was present as the chief guest of the MoU signing ceremony. The ceremony was conducted by Md. Matiur Rahman, Executive Member (Additional Secretary), Marketing & Communication as a chairperson of the event. LABCCI president Md. Anwar Shawkat Afser and Md. Matiur Rahman, Executive Member (Additional Secretary), Marketing & Communication signed the MoU, reports BSS. Speaking on the occasion, Lokman Hossain Miah, Executive Chairman (Senior Secretary) of BIDA, mentioned that the present government led by Prime Minister Sheikh Hasina created a friendly environment for businessmen.
Banks waive off Tk5,064cr in loan interests in 2022
Default loan rescheduling and loan interest waivers have increased at an unusual rate in the banking sector, according to the latest Bangladesh Bank data. Lenders waived off some Tk5,064 crore while rescheduling loans throughout 2022. It is Tk3,209 crore higher than that of the previous year. For such a situation, sector insiders blamed the liberal policy of the central bank which empowered bank owners to waive loan interests on nominal down payments. Besides, the desperate attitude of banks to recover outstanding loans which got stuck thanks to pandemic-induced relaxed policies also contributed to the surge in waived-off interests. “All the benefits of loan rescheduling and waiver are received by some large borrowers, who are mostly wilful defaulters,” Salehuddin Ahmed, former central bank governor, told The Business Standard. “Currently the banking sector is very unfortunate. The central bank is not taking proper actions, banks are tactfully making their balance sheet look good. No one is giving due importance to protecting the interests of the depositors.” “The central bank should play a stronger role to curb such irregularities in the banking sector. For example, strict measures should be taken if any customer defaults. At the same time, new loans should be scrutinised properly,” he added. According to the Bangladesh Bank, banks waived off Tk1,194 crore in loan interest in 2018 as the figure jumped to Tk2,293 crore next year. It dropped slightly to Tk1,578 crore in 2020 and spiralled again to Tk1,855 crore in 2021. Besides, banks rescheduled loans of Tk27,279 crore in 2022, almost two times more than Tk12,380 crore in 2021. It was Tk13,468 crores in 2020.