BB asks banks to step up monitoring on export

The Bangladesh Bank has instructed the country’s banks to strengthen their monitoring on export related trade to check under invoicing as the regulator noticed that a rising number of export proceeds are not coming to the country.

The central bank also will introduce a short term moving average rate in lending after the next monetary policy in July this year instead of single digit lending rate.

Now the highest lending rate is 9 per cent, except consumer loans and credit cards.

The central bank in January this year relaxed the lending rate cap for consumer loans, allowing banks to hike it up to 3 percentage points from the current level.

The decisions were made at a meeting with bankers held at the central bank headquarter on Sunday.

Bangladesh Bank Governor Abdur Rouf Talukder presided over the meeting attended by the chief executives of most of the banks.

After the meeting, central bank Executive Director and Spokesperson Md Mezbaul Haque told the reporters that the banking regulator is now going to monitor export related trade and asked banks to strengthen their monitoring also.

He said that Bangladesh Bank is monitoring every letter of credit (LC) to check the pricing of US dollars.

Banks are opening 1,500 to 2,200 letters of credits daily, he mentioned.

The number of LCs being opened now is equal to the pre-monitoring period, but we are able to reduce the value of LC due to monitoring, Haque added.

The value of LCs came down to $5.5 billion from $8.5 billion due to the monitoring of the central bank. This is a big achievement of the central bank, he said.

Haque said that the interest rate on lending will be market based and there will be a reference rate.

He said that the BB will fix a corridor of interest rate on the average interest rate of six months Treasury bond rates.

The meeting also discussed the central bank’s recent initiative for cashless Bangladesh, the current situation of unsettled cases in Artha Rin Adalat (money loan court) and the issue of building a specialised hospital for bankers, said central bank officials.

The Bangladesh Bank in January this year started a cashless campaign titled “Cashless Bangladesh” involving 10 banks, three mobile financial service (MFS) providers, and three international payment service providers (PSP).

Now the central bank wants to include all the banks in this campaign with a QR code payment system, said central bank officials.

The current situation of unsettled cases in Artha Rin Adalat (money

loan court) is also a major issue at the meeting.

As of December last year, the Artha Rin Adalat recorded 72,189 cases and Tk 1,66,887 crore are stuck against those cases, shows the latest data of the central bank.