The central bank has asked the banks to exhaust all stimulus packages by March to help revive the economy, battered by Covid-19.
The advice was given at a virtual meeting between the bankers and Bangladesh Bank (BB) governor Fazle Kabir.
"We've advised the bankers to disburse the stimulus packages within the deadline for revamping the country's economic activities," the central bank's spokesperson Serajul Islam told the FE after the meeting.
Mr Islam, an executive director of the central bank, said the BB also gave a 'strong message' to clear both local and foreign unsettled import bills immediately.
"The private sector credit growth will be increased in the coming months if the banks implement the financial packages fully by March 31," the spokesperson said.
The BB's directive came against the backdrop of slower progress in loan disbursement under the packages, particularly for the cottage, micro, small and medium enterprises (CMSMEs).
The stimulus package for large industries and services has almost been disbursed while 58 per cent was executed in another package for the CMSMEs until January 21.
Nearly Tk 309 billion was disbursed as working capital until January 25 under the stimulus package of Tk 330 billion for large borrowers in industrial and service sectors. The implementation rate of the package is nearly 94 per cent.
But the banks and non-banking financial institutions disbursed Tk 115 billion of the stimulus package to the smaller firms, which are 58 per cent of the total allocation of Tk 200 billion.
Loans amounting to around Tk 130 billion were approved for 81,000 Covid-affected CMSMEs across the country during the period, the BB's data showed.
At the meeting, the BB governor thanked 10 banks, which have already implemented their 100 per cent initial targets, set by the central bank, of the stimulus package for the CMSMEs.
The banks are BRAC, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, Bank Asia, Prime, One, Eastern, Uttara, Modhumoti and Bank Alfalah.
Besides, three other private commercial banks have achieved more than 80 per cent of their initial targets of the financial package for the CMSMEs, according to BB officials.
Against the backdrop of failure by banks and non-banking lenders to serve CMSMEs, the central bank extended the deadline for three more months.
Under the revised deadline, banks and NBFIs are now allowed to implement the package for the sector by March 31, 2021, instead of December 31, 2020, according to a notification, issued by the central bank on January 03.
Talking to the FE, M A Halim Chowdhury, managing director (MD) and chief executive officer (CEO) of Pubali Bank Limited, said: "We've already taken effective measures to execute all the stimulus packages in line the BB's advice."
The implementation of such packages will also help achieve the desired level of the economic growth by the end of this fiscal year, the senior banker noted.
At the meeting, the central bank also asked the banks to settle unsettled local and foreign import bills within a deadline that will be set by the BB, according to another central bank official.
The central bank will clear the unsettled import bills by debiting the respective bank accounts with the BB if the banks fail to settle such bills within the timeframe, he added.
The BB's warning came in view of a rising trend in unsettled import bills by some local banks, which has tarnished the image of the country's financial sector in the global market.
The unsettled overseas import bills stood at US$23.79 million as of September 2020 while the banks did not settle the local import bills amounting to $31.22 million.
The central bank has recently verified the unsettled import bills of 29 banks, of which the performance of some lenders was not good, according to a central bank's report.
"We should settle such import bills on time for the sake the country's image," Syed Mahbubur Rahman, former chairman of the Association of Bankers, Bangladesh (ABB), told the FE.
Mr Rahman, also MD and CEO of Mutual Trust Bank Limited, said it is expected to help reduce the cost of 'add confirmation' charges for opening letters of credit (LCs).