Md Mehedi Hasan

The private sector credit growth in Bangladesh nosedived to single digit in July as both banks and borrowers face multiple challenges amid lingering economic uncertainty at home and abroad and the growing political crisis centring next year’s national elections.

The jewellery industry has apparently remained largely dependent on unauthorised channels for sourcing gold although there is no direct government bar on importing the precious metal. 

Short-term private sector foreign debt has continued to fall since January of this year, with new disbursements being outweighed by repayments each month this year except May.

Remittance saw its steepest decline since the depths of the pandemic in August as expatriate Bangladeshis eschew the official channels to send money home thanks to the wide difference in the official and kerb market exchange rates.

Almost all major foreign currencies like the European Union’s euro, British pound sterling, Chinese renminbi, Japanese yen and Indian rupee are following in the footsteps of the US dollar in becoming stronger against the local currency. 

The exchange rate gap in the official and unofficial channels in Bangladesh has started to widen after a few months of lull as the US dollar is getting costlier in the informal market, a development that may adversely impact the remittance flow.

Bangladesh Bank received 52 applications for the digital bank licence, with the majority of the forms coming in from the existing 62 banks -- when their current licence allows them to offer the same service already.

The bank did not take prior approval for re-electing Ron as a director

Bangladesh Bank has directed five Shariah-based banks to resolve their current liquidity crisis while three of them were asked to bring down their advance-deposit ratio (ADR) within the regulatory limit as soon as possible. 

The government has started the fiscal year with the resolve to borrow less from the central bank to fund its budget deficit as it looks to rein in the runaway inflation to a tolerable level ahead of the polls.

For the first time, the central bank has published full-fledged data on stressed assets of banks, laying bare the sector’s deep ills that have been a subject in the public discourse for long as irregularities and scams often make headlines.

Fourteen non-bank financial institutions (NBFIs) out of a total of 35 were in the red zone last year as per the stress test report of the central bank. 

Banks in Bangladesh were bottom-ranked in 2022 among South Asian lenders when it comes to capital base, owing largely to rising non-performing loans. 

A majority of banks in Bangladesh are facing difficulties in running their day-to-day banking activities owing to a tightening liquidity caused by the dragging foreign currency crisis, slower deposit growth and lacklustre loan recovery. 

Investment in cybersecurity is very much essential and banks which are not investing in their digital operations and cyber security will totally go out of business within the next three or four years, said Selim RF Hussain, chairman of the Association of Bankers, Bangladesh (ABB). 

Bangladesh Bank slapped five shariah-based banks with fines amounting to Tk 281.3 crore in the first six months of the year for their failure to maintain the minimum levels of cash and liquidity.

Islami Bank has tightened its lending activities as the embattled bank looks to shore up its financial health by September.

In 2011 when mobile financial service (MFS) was introduced in Bangladesh, 27 banks took the approval from the central bank as many had correctly predicted an impending boom in mobile banking amid rising usage of cell phones. 

Bangladesh’s external sector continues to be in distress as the overall negative balance widened by 23.5 percent last fiscal year despite the narrowing trade gap and current account deficit.

The Bangladesh Bank has stepped up efforts to roll out a national card this year in order to cut the country’s reliance on international cards and save foreign currencies.