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'Govt not to refinance state-owned commercial banks anymore'

Finance minister says


Published: August 25, 2019 20:07:56 | Updated: August 26, 2019 10:01:38


-File photo

The government will not refinance the state-owned commercial banks -- Sonali Bank Ltd, Rupali Bank Ltd, Agrani Bank Ltd and Janata Bank Ltd -- anymore to address their capital crunch.

Finance Minister AHM Mustafa Kamal came up with the statement at a press briefing after holding a meeting with the new top management of the four state owned commercial banks at the NEC at his office in city’s Sher-e-Bangla Nagar area on Sunday, reports BSS.

“There will be no more refinancing to the banks. These banks (state owned commercial banks) will have to earn their money and pay taxes to the government. This is the final decision,” he said.

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 the submitted work plans.

Mentioning that the new top managements of these four banks are clearly very much skilled, the minister said, the country could expect much better in the coming years if they could run their banks with their acquired knowledge and experiences considering the local and global context.

He said that the role and performance of these four banks is also important as these comprise around 25 per cent of the country’s banking sector.

Ruling out the media report that there is liquidity crisis in the country's banking sector, Kamal said as of today, there is access liquidity of around Taka 920.00 billion and it could be used and further invested.

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.

Turning to the issue of Non Performing Loans (NPLs), the Finance Minister said the government is yet to make effective the ‘exit plan’ for addressing the NPLs since the matter is being stayed at the High Court.

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

Kamal said if the ‘exit plan’ is properly executed, the NPL would reduce to a huge extent while the scenario of the country’s trade and commerce would be changed a lot.

He said once the writ filed with 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.

Answering to a question, Kamal said he had suggested these banks to pay attention so that the NPL is not increased further, these banks would have to continue efforts to make 15 per cent profit per year, to utilize their resources properly and keeping due security before providing loans.

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, then the growth would not reach below 8 per cent in the coming years,” he added.

Kamal said the country would start getting the benefits of large infrastructural investments in the coming years.

He also asserted that there is no apprehension over the country’s economy.

Bangladesh Bank Governor Fazle Kabir, Finance Division Secretary Abdur Rauf Talukdar and Financial Institution Division Secretary M Ashadul Islam were present among others.

 

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