BB looking into remittance fall
DHAKA : Bangladesh Bank (BB) has started working to find out reasons behind the downturn in the inflow of remittances, said governor Fazle Kabir.
“Two research teams of the central bank will soon visit Malaysia and Middle Eastern countries to find out the reasons of falling trend in the inflow of remittance,” said the governor while speaking at the first quarterly luncheon meeting of MCCI here today.
Metropolitan Chamber of Commerce and Industry (MCCI) president Barrister Nihad Kabir and its former vice-president Anis A Khan also spoke on the occasion.
Fazle Kabir said ‘informal’ channel for sending money from Malaysia and different Middle-East countries is still strong. So BB is thinking to reduce the cost for sending remittances from these countries using formal channel, he added.
He, however, said there is nothing to worry because of fall in the flow of remittances because the country has enough forex reserves to meet import costs of eight months.
The governor said lending rate is not coming down to the expected level because of nonperforming loan. Out of the total loan amounts, about 10.03 percent is default one and 25 percent of this default credits is with the state-owned banks, he added.
Mentioning Small and Medium Enterprise (SME) sector as the future driving force of the economy, the central bank governor said the main problem in getting SME loan is giving non-transferable collateral. BB has started thinking about this issue, he added.
“We are thinking whether we can follow the simple rules like the agro credit ones for SME loan disbursement in future,” he said and added that the manufacturing sector will be given priority in disbursement of SME loan in future.
MCCI president Nihad Kabir requested the central bank to liberalize the foreign currency policy for expansion of overseas trade. She also requested BB to keep equal allocation in Export Development Fund for RMG and non-RMG sectors which would be helpful for diversification of export items. At present, readymade garments gets US$ 20 million worth incentives while non-RMG gets US$15 million from the EDF.
Anis A Khan requested the central bank to introduce “Bank Insurance” in banking sector, saying that it would help bring a qualitative change in insurance sector.