• Wednesday, Sep 30, 2020
  • Last Update : 08:16 pm

DT webinar: How Covid-19 will change the economy, banking and capital market

  • Published at 03:33 pm May 23rd, 2020

Dhaka Tribune’s webinar over Covid-19’s impact on economy, banking and capital market

The economy will face huge challenges, the transaction behaviour of banking and the capital market will also change in the upcoming days owing to the coronavirus pandemic, bankers, merchant bankers, and professionals opined.

The experts of the banking industry expressed their concern and views addressing a webinar on the impact of Covid-19 on the economy, banking, and capital market on Saturday.

Dhaka Tribune and UCB Capital Management Ltd arranged the webinar, which was broadcast live on Dhaka Tribune's Facebook page. UCB Asset Management Ltd CEO SM Rashedul Hasan moderated the session.

Association of Bankers, Bangladesh (ABB) former chairman Syed Mahbubur Rahman said: “We will face a great challenging time in near future.  The country’s export and remittance are already impacted badly by the Covid-19 pandemic.”

The government has taken several stimulus packages, which are implementing through the banking channels but the implementation of the packages is very challenging, said Mahbubur Rahman.

“We are concerned about the recovery of the fund from the customers, in this case, we demand credit guarantee to implement the packages,” he said.

He added: “The suspension of the collection of interest from borrowers impacted the banks severely. So we are waiting for the central bank’s next decision for complete guidelines about the issues.”

Replying to a question, the Managing Director of Mutual Trust Bank said the central bank should further reduce the rate of the repo. 

“We also demand the relaxation of ADR (Advance to Deposit Ratio) and the regulator should cut the rate of SLR to boost liquidity in the market,” Mahbubur said.

He also said that the coronavirus pandemic will change the protocols of banking. 

“We are now emphasizing on automation and digital banking. We should also focus on cutting down the operation cost and office space and prefer to work from home. However cutting down the salary will not be a good decision,” he said.

Bangladesh Merchant Bankers Association President Md Sayadur Rahman said the intermediate sector of the capital market faced huge pressure due to the lockdown. The merchant banks and broker houses are closed for two months. During the period, they are paying salary and bonus to employees despite all businesses being closed.

“We demand six months’ operational cost from the government as all of our businesses are closed,” he said.

“The present situation of the capital market may negatively impact investors. As a result, the market should be reopened immediately like the banks, said Sayadur Rahman.

While answering to a question, Sayadur Rahman said the decision of the central bank on the dividend of banks against their share is perfect. However, investors may feel unhappy for a short time due to the new regulation on declaring dividends.

CFA Society Bangladesh President Shahidul Islam said that if the present situations do not run for a longer period, they can recover the economy soon as their balance of payment is not in a vulnerable situation.

He said, directly and indirectly, 99% of businesses have been badly impacted by Covid-19.

When the government lifts the lockdown, there should be some restriction for social gathering. Personal hygiene and other health issues should be a priority for reopening businesses, Shahidul said.

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