Growth in loans is higher than in bank deposits
Due to high inflation and low interest rates, people have reduced their deposits in banks. On the other hand, borrowing from banks has increased due to increase in dollar price and expenditure in various sectors. Due to this, the growth in loans was more than 10 percent compared to deposits in the bank sector last December.
According to the statistics of Bangladesh Bank, deposits in the banking system increased by only 2 thousand 281 crores in December. In the same month, bank loans increased by Tk 22 thousand 930 crores. That is, in the last month of last year, many banks have faced liquidity crisis as the growth in loans is higher than the deposits in the banking sector. Due to this, several banks have to borrow money at high interest rates.
Bankers say one of the reasons for the decline in the growth of bank deposits is that the interest rate on deposits is now lower than the rate of inflation. On the other hand, the banks are not able to increase the interest rate on deposits. Because Bangladesh Bank has fixed the maximum interest rate of 9 percent for most of the loans. As a result of not being able to increase deposits, some banks are borrowing money from other banks at an interest rate of more than 9 percent due to funding crisis.
When asked, former MD of Agrani Bank, Mohammad Shams ul Islam, said that due to the increase in the cost of living, many people are losing their savings and new savings have also decreased. Due to this, loans are increasing more than deposits. However, the debt increased more in December, as interest accrued in that month. Meanwhile, the initiatives taken by the central bank to solve the ongoing liquidity crisis in the banking sector will play a major role in solving the crisis of the banks.
When asked about this, Mohammad Shams-ul-Islam said, “The loan interest rate should be increased gradually without raising it completely.” If the interest rates are put together, some banks will make more profit by paying less interest on deposits, while others will withdraw deposits with higher interest. It can cause chaos.
One of the reasons for the increase in loans from banks is also attributed by some to the increase in the value of the dollar against the taka. Earlier, traders used to spend 85 rupees against each dollar, now it is 105 rupees. As a result, traders have to spend more money than before to import goods, that is, debt has increased.
According to the data of Bangladesh Bank, last November bank deposits were 14 lakh 86 thousand 888 crores. In December, it increased to 14 lakh 89 thousand 169 crores. As a result, deposits in the bank sector increased by Tk 2,281 crore in December. Deposits decreased by Tk 3,155 crore in November. Last October, the amount of deposits in the bank sector was Tk 14 lakh 90 thousand 43 crores.
Meanwhile, last December, deposits increased by Tk 2,281 crore, but loans given by banks increased by Tk 22,930 crore. Last November, the amount of bank loans was Tk 14 lakh 18 thousand 266 crore, in December it increased to Tk 14 lakh 41 thousand 196 crore. And in October, the bank loan was Tk 14 lakh 345 crore. As a result, the debt increased by 17 thousand 921 crores in November
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