The Association of Bankers, Bangladesh Limited (ABB) top members emphasized on Monday that effective governance in the banking sector can help control non-performing loans (NPLs), which have been a major concern in recent years.
During a press conference on "Bangladesh Banking Sector Outlook 2023," organized by ABB, Selim RF Hussain, Chairman of ABB and CEO of Brac Bank, addressed the issue of Taka depreciation, stating that 2022 witnessed the highest depreciation in the currency's history.
"In 2022, we experienced a Taka depreciation of up to 20-25% against the dollar, the highest in recent memory. While the situation is improving, it will take some time to regain the position we had in 2017-2019," he remarked.
Speaking about the improved sources of foreign currency, he said that banks can now open LCs but not for everyone.
Hussain added that most banks are now regular in foreign payments, although a few banks may still encounter some difficulties. He highlighted the improved sources of foreign currency and the increased caution exercised by banks when opening Letters of Credit (LCs).
Addressing trade-based money laundering, Hussain mentioned that vigilant monitoring by banks and the central bank has helped curb over and under-invoicing of imported goods, leading to a decrease in such illicit activities.
Mashrur Arefin, vice-chairman of ABB and CEO of City Bank, noted the positive shift in the net opening position of dollar holdings of banks, attributing it to the increase in remittance inflow and deposits. He also highlighted the narrowing gap between formal and informal market rates, indicating the banking sector's return to stability.
Arefin stated that the Bangladesh Bank's intervention has contributed to stabilizing the foreign exchange market, with the gap between formal and informal market rates now limited to a maximum of Tk1. He mentioned that the net opening position of banks' dollar holdings has improved from a negative $600 million to $38 million.
Furthermore, Arefin shared that the surplus liquidity in the country has reached Tk1.35 lakh crore. While the liquidity crisis has not fully returned to pre-crisis levels, significant improvement has been observed.
The event was also attended by Abul Kashem Md Shirin, CEO of Dutch-Bangla Bank Ltd, and Syed Waseque Md Ali, CEO of First Security Islami Bank Ltd.
