Md Mehedi Hasan

A majority of banks in Bangladesh, including some Shariah-based ones, are facing difficulties to run their activities due to a liquidity crisis, according to industry people.

After banks, it is now the non-bank financial institutions (NBFI) sector that has logged in a record volume of defaulted loans, in yet another data point that informs of the alarming state of the country’s overall financial sector.

Bangladesh Bank introduced a new formula in June to determine the lending interest rate and brought about a single exchange rate recently but both are yet to be determined by the open market, the International Monetary Fund (IMF) has said.

With the high rate of non-performing loans (NPLs) being a major challenge for the banking sector, just 25 of the 61 commercial banks in Bangladesh are managing to keep their NPL rates below 5 percent.

A record 15 banks, including seven state-run lenders, faced capital shortfall in the second quarter of 2023, in yet another indication of the worrying state of the financial sector.

The defaulted loans in 10 banks, including four state-run lenders, increased at an alarming rate in fiscal 2022-23, indicating their worsening financial health.

Amid criticisms over the delay in squeezing money supply, the Bangladesh Bank yesterday made borrowing costlier as it raised the policy rate by 75 basis points to 7.25 percent to step up its fight against inflation..This is the sharpest pace of rate increase in at least a decade, said a ce

Private sector credit growth in Bangladesh has continued to dip in recent months, with banks and borrowers adopting a go-slow strategy amidst the stress on the economy and growing apprehensions of a political crisis centring the upcoming parliamentary elections.

Non-performing loans (NPLs) in Bangladesh’s banking sector hit a new record in June as withdrawal of a relaxed central bank policy, slowdown in business sales and deliberate non-payments pushed up the volume of bad loans to Tk 1,56,039 crore, central bank data showed.

The bad loans rose by Tk 24,419 crore in the last three months to June

Beneficiaries of wage earner remitters receive a 2.50 percent cash incentive on top of the market-determined exchange rate for any amount of remittance inflow.

Russia has included Bangladesh on its list of friendly and neutral countries, a development that would allow its local banks and brokers to settle trade transactions in the rouble.

Commercial banks witnessed a drop in foreign currencies last month from that in the preceding month mainly due to a sharp fall year-on-year in the inflow of remittance and a relatively small growth in export earnings.

The Bangladesh Bank is going to take a raft of policy measures to tackle inflationary pressure, volatility in the foreign exchange market and growing non-performing loans (NPLs) and give a much-needed boost to the forex reserve.

Standard Chartered Bangladesh (SCB) and Islami Bank Bangladesh PLC have received approval from Bangladesh Bank to conduct bilateral trade with India using the rupee. 

The Bangladesh Bank has asked 10 banks’ managing directors why their treasury heads should not be penalised for their involvement in dollar rate manipulation this year.

The foreign exchange crisis in Bangladesh has dealt a blow to credit card users as the sharp appreciation of the US dollar against the taka has narrowed their scope for foreign purchases through cards.

Distressed Islami Bank has approved a Tk 700 crore loan to a concern of AnonTex Group, one of the five large borrowers of Janata Bank that has been enjoying undue facilities despite making negligible repayment in 13 years.

Due to its geographical susceptibility, Bangladesh faces significant vulnerability to climate change. Consequently, the importance of sustainable finance, encompassing a suite of financial regulations, standards, and products aimed at environmental objectives, has grown significantly in recent years.

A uniform exchange rate has remained a far cry in Bangladesh despite banks moving to embrace a single rate of the US dollar amid a deepening shortage of the American greenback.