AppId is over the quota
Siddique Islam
The growth of overall deposit with the country's banking system witnessed a rising trend in recent months mainly because of higher inflow of remittances, decreasing net sales of savings certificates and sluggish stock market.
Bank deposit increased by about 14 per cent to Tk 4238.88 billion on October 06, 2011 against Tk 4140.53 billion on June 30 this year when the annual rate of deposit growth stood at 11.22 per cent, according to the central bank statistics.
"Deposit growth rate has comparatively been higher than that of credit growth in the banking sector in recent months, reflecting normal economic activities in the country," a senior official of the Bangladesh Bank (BB) told the FE Sunday.
Credit growth, particularly in private sector, rose by 8.80 per cent to Tk 3444.49 billion in the period under review from Tk 3362.23 billion on June 30 last when the annual rate of growth was 6.20 per cent.
He also said the central bank has calculated the growth rates, using a benchmark which was set considering the situation on December 30 last in both money and stock markets.
"We've calculated the growth performance of both bank deposits and credits, considering the volatile situation in both money and stock markets on December 30 last," the central banker said, adding that the BB wants an alignment between growth of credit and increase of deposit.
"The central bank has already set credit-deposit ratio (CDR) at 85 per cent for conventional banks while Sharia-based Islamic banks, it remains at 90 per cent as the safe limit," the BB official noted.
At least, 16 banks, out of a total of 47, have exceeded their CDR limit for credit disbursements on October 06 last, the BB data showed.
"We're watching closely the overall CDR positions of the commercial banks to avoid any risk," the central banker said, adding that the BB is issuing letters, asking the banks concerned to bring down their CDR within a safe limit.
Talking to the FE, a senior private banker said higher inflow of remittance has contributed to increased bank deposit in the recent months.
Bangladesh received $2.96 billion as remittances during July-September period of the current fiscal year (FY), registering an 11.35 per cent growth over the corresponding period of the previous fiscal, the BB data showed.
About credit flow, he also said most commercial banks have followed selective banking, instead of 'mass banking' during the period under review, in line with the BB's latest monetary policy statement (MPS).
In its latest half-yearly MPS, the central bank stated that it would aim at containing inflationary pressures through discouraging credit flow to unproductive sectors and for speculative purposes including real estates and investments in stock market, beyond affordable limits.
"We're now discouraging investments in less productive sectors including consumers' credit," another senior official of a leading private commercial bank said.
The net sales of the National Savings Directorate (NSD) certificates fell drastically -- by more than 69 per cent -- to Tk 3.37 billion in July-August period of the FY 12 against Tk 10.98 billion in the same period of the FY 11.
"Some savers deposited their funds with the commercial banks after encashment at maturity of their savings certificates," the private banker said, adding that stock investors have also deposited their money with the banks after the share market debacle.
The country's stock market lost substantially, in terms of market capitalisation of all the listed issues, leading to a sharp drop in its index, in recent months.
The benchmark index of Dhaka Stock Exchange (DSE), the country's prime bourse -- generally known as DGEN -- came down to 5077.13 point Sunday from its highest 8918.51 point on December 05 last, the DSE data showed.
Source: thefinancialexpress-bd.com
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