Huge defaulted loans in state-owned commercial banks to hit GDP growth

Bangladesh Bank governor Fazle Kabir on Tuesday said excessive defaulted loans in the state-owned commercial banks would put an obstacle in achieving expected GDP growth in the coming years. The government will set a target of 8% GDP growth in the coming fiscal years but the country would have to face a tough condition if the existing higher defaulted loans persist in the SCBs, he said while addressing as chief guest the inauguration ceremony of the ‘Banking Related Orientation Workshop-2017’ at the central bank headquarters in the capital. ‘Classified loan witnessed around 10.34% as of September 30, 2016 in the banking sector. But the rate is very high in the state-owned banks. We will have to decrease the defaulted loan to achieve the expected GDP growth in the coming years,’ he said. All economic indicators but inward remittance are performing nice in the recent months, the BB governor said. The inward remitted declined by 16.90% in the first seven months of the fiscal year 2016-17 on the basis of year-on-year, he said.

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http://www.newagebd.net/article/9162/recovery-of-classified-loans-major-challenge-says-bb-governor

Fall in private firms’ foreign borrowing cheers banks

Foreign borrowing by private-sector firms has fallen substantially, giving a much-needed relief to a number of local banks burdened with excess liquidity, officials said. Although the number of proposals for external loans approved by the scrutiny committee under the leadership of the Bangladesh Bank (BB) governor has gradually gone up in recent years, they said, the actual inflow of overseas funds has been on a significant decline over the last three financial years since 2013-2014. According to the central bank statistics, private entrepreneurs drew foreign loans equivalent to USD 1840.18 million (over USD 1.8 billion) in FY’14 and the volume declined to USD 977.8 million and USD 729.6 million in FY’15 and FY’16 respectively. The data recorded the outstanding aggregate loans worth USD 2524.28 million, USD 3194.01 million and USD 3427.11 million in the last three consecutive fiscal years. In the FY’16, the borrowers repaid USD 474.0 million worth of principal amount and USD 98.2 million and USD 1.06 in interest and commission respectively. But the scenario was completely different on the number of approved proposals for such loans as the six-man scrutiny committee approved 102 proposals involving USD 1182.1 million in the calendar year 2013 followed by 162 proposals amounting to USD 1827.17 million in 2014, 129 proposals involving USD 1930.3 million while 148 proposals amounting to USD 1383. 97 million were recorded in 2016.

Source: http://print.thefinancialexpress-bd.com/2017/02/15/164858

Govt staff may get up to Tk 50 lakh in home loan

The government is planning to increase the housing loan ceiling for its employees up to maximum Tk 50 lakh. Officials said the minimum ceiling of home loan in district towns could be Tk 10 lakh against the backdrop of growing housing problem of the government officials. Currently, the government provides only Tk 1.2 lakh with 1.2 per cent interest rate as the home loan to its employees who have been demanding to increase the ceiling for long. Finance secretary Mahbub Ahmed said a committee was appointed headed by additional secretary of the finance division in August to fix the ceilings and the rate of interest. He said the committee would be able to prepare the recommendations soon for seeking approval of the cabinet.

Source: http://www.newagebd.net/article/9106/govt-staff-may-get-up-to-tk-50-lakh-in-home-loan

Lower remittance inflow worries Bangladesh Bank governor

Bangladesh Bank (BB) governor Fazle Kabir expressed on Tuesday his concern over an increased volume of non-performing loans (NPLs) in the banking system and a sustained downward trend in the country’s inward remittances. “It is a big challenge to bring down the amount of NPLs in the banking sector, especially in the state-owned banks. Attainment of the country’s desired GDP (Gross Domestic Product) growth will be affected unless NPLs come down to an expected level,” he said. Currently, NPL in the country’s banking sector has stood at 10.34% of the total loans. There is a huge amount of NPLs in the state-owned banks, he said while inaugurating an orientation course on banking for the members of the Economic Reporters’ Forum (ERF) organized by the central bank at its conference room. The BB governor also expressed concern over the declining trend in remittances in recent times. “Remittance has declined by 16.9% in seven months. We are taking measures to improve the present situation. We are working to find out the reasons behind the downturn in the inflow of remittances,” he added.

Source: http://print.thefinancialexpress-bd.com/2017/02/15/164869