BSS-58 Kamal suggests banking sector leaders to keep NPL in control





Kamal suggests banking sector leaders to keep NPL in control

DHAKA, April 28, 2020 (BSS) – Finance Minister AHM Mustafa Kamal has advised the banking sector leaders to keep the Non-Performing Loans (NPLs) in control as the road ahead of economic recovery would be challenging.

He also emphasized on putting a lid on the banks operating cost and reducing the cost income ratio.

He also advised to cut down unnecessary costs during this period.

The Finance Minister said this at a video conference today and discussed issues on how to bring the economy back on track and how best the government’s stimulus packages can be injected to the economy through the banking sector.

Alongside the Finance Minister, the video conference was participated by Governor of Bangladesh Bank Fazle Kabir, Chairman of Bangladesh Association of Banks (BAB) Nazrul Islam Mazumder, and Chairman of Association of Banks, Bangladesh (ABB) Ali Reza Iftekhar, said a press release.

During the video conference, Kamal sought inputs from all to develop a bond market for alternate financing of Bangladesh economy.

Mentioning that the banking sector is the lifeline of the economy, he reassured that the government will do everything in its capacity to support the banking sector to put the economy back to the pre-coronavirus situation.

BB Governor Fazle Kabir apprised the Finance Minister about all the stimulus packages and the ongoing implementation of those.

He also assured the Finance Minister that the Bangladesh Bank will provide all the necessary policy support and guidance to keep the business community and banking sector stable.

Chairmen of BAB and ABB praised the government stimulus packages worth over Taka 98,619 crore to overcome the coronavirus economic impact. The overall size of the packages stood at 3.5 percent of the country’s gross domestic product.

ABB chairman commended Bangladesh Bank’s (BB) initiatives and policy support to make available required liquidity to inject necessary funds to the businesses.

The central bank has already slashed cash reserve requirement or CRR by 150 basis points to 4.0 percent from 5.50 percent to facilitate the banks to implement the government announced financial stimulus packages.

Iftekhar also appreciated central bank’s move to cut repo rate by 75 basis points to 5.25 per cent from 6.00 percent.

Central Bank’s latest moves have helped the banks to manage their funds efficiently despite higher withdrawal pressure on cash, even as deposits shrink in the aftermath of coronavirus outbreak.

The ABB Chairman said that the financial health of the banks is now most crucial to the recovery of the economy from the impact of coronavirus pandemic, as there is no alternative source to support and inject money into the economy.

He also requested for considering establishment of Credit Risk Guarantee Scheme for the banks to protect the loans and advances given under the recent stimulus packages.

BAB Chairman Mazumder assured the Finance Minister to implement all the suggestions and advices given by him.

He requested the Finance Minister and BB Governor to extend the time frame from June 30 to December 31, 2020 regarding the downgradation of accounts.

The BB Governor has said he will look into the matter when time will come.

At the end, both BAB and ABB chairmen thanked the Prime Minister, Finance Minister, and BB Governor for their timely involvement and support during this difficult time.

The release said the Chairmen of BAB and ABB will sit again soon to find out the modalities to implement the recommendations and suggestions discussed at the conference.

They will request all the banks to prepare a road map to implement the suggestions made and submit to their respective board.

BSS/PR/GM/ARS/2212 hrs