Monirul Alam of DOT
Higher volume of non-performing loans (NPL) is a result of prolonged expansionary credit policy enabling private sector entrepreneurs to get privileged of financing facility from banks and financial institutions, said a top official of Bangladesh Bank (BB) yesterday. In last few years, credit to private sector recorded growth around 14 to 16.95 percent. At the same time, NPL also grew alarmingly to a level of 11.45 percent of outstanding loans at end of September 2018. Referring this, a top BB official requesting anonymity said that the central bank could not ensure prudent investment and recovery of bad loans despite stringent instructions on banks as the country’s growing economy demands more financing facility to private sector entrepreneurs.
“High volume of NPL is a result of expansionary credit policy,” said the official, adding, “The role of the central bank is to maintain stability of the financial sector at any cost. Besides, the central bank’s roles included building strong basis of the financial sector.”
The official said the central bank currently is working on finalizing its Monetary Policy Stance (MPS) for the January-June periods. The size of the country’s GDP (Gross Domestic Product) is increasing year-on-year. Therefore, the monetary policy has to be accommodating to fiscal strategies, the official added.