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Dhaka Tribune

Bangladesh Bank expresses annoyance over poor loan disbursement

As per central bank data, 20 out of 42 banks which were asked to disburse loans from the package, are yet to disburse a penny in loans for low-income people

Update : 06 Oct 2020, 09:32 PM

The Bangladesh Bank (BB) on Tuesday expressed dissatisfaction over the poor disbursement of stimulus loans to low-income groups of people, farmers and marginal or small businesses from the Tk3,000 crore refinance scheme.

The BB expressed its displeasure at a meeting held at its headquarters in the city on Tuesday. BB executive director Joarder Israil Hossain presided over the meeting where the general manager of the bank, Md. Anwarul Islam, and representatives of 20 banks, among others, were present.

As per BB data, 20 out of 42 banks which were asked to disburse loans from the package, are yet to disburse a penny in loans for low-income people. The 20 banks include 8 state-owned banks and 12 private commercial banks.

Twenty-two banks have sanctioned Tk1,325.71 crore from the scheme while the remaining 20 banks are yet to sanction any funds for low-income groups of people, despite the fact that the adverse impact of floods along with the coronavirus has made the situation difficult for them.

Of the sanctioned amount, the banks have so far disbursed Tk591.86 crore to microcredit institutions, also known as NGOs, for the amount to be given out as loans to people at up to 9% interest.

At the meeting, the BB instructed banks to complete the disbursement from the refinance scheme within this year. 

Talking to Dhaka Tribune, BB executive director Joarder Israil Hossain said the banks had been instructed to strengthen their monitoring over their loan disbursement from the Tk3,000 crore refinance schemes. 

The banks were also asked to take the assistance of the well performing NGOs in particular areas where loan disbursement was still poor, he said.

As per the guidelines of the refinance scheme, customers are supposed to get loans from the scheme at a rate of 9% interest from non-governmental organizations (NGOs) while the BB will provide funds to banks at 1% and the banks will lend the funds to NGOs at 3.5% interest.

Along with the eight state-owned banks, a number of large banks, including Bank Asia, Eastern Bank and Southeast Bank, have also stayed away from loan disbursement from the scheme.

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