Banks asked to implement stimulus packages with due diligence

The finance ministry has urged state-owned banks to implement stimulus packages announced by the government with due diligence amid the Covid-19 fallout. The banks have been categorically asked to ensure due implentation of these stimulus packages and check for irregularities in this regard. The banks have also been asked to inform the ministry if they face any financial damages in the fallout. These issues and more were discussed in a virtual meeting on Thursday headed by Ashadul Islam, Senior Secretary of Financial Institutions Division, Ministry of Finance.

The agenda of the virtual meeting included forecasting banks’ losses if any, bank’s preparedness to overcome the coronavirus fallout and planning on implementation of stimulus packages and overcoming challenges in this regard. The banks were asked to follow Bangladesh Bank’s (BB) instructions in running their operations during the pandemic.

It was learned that BB also extended its discretion on amount of fund to be allocated by each banks to big industries and service sector and also to the Cottage, Micro, Small and Medium Enterprise (CMSME) sector under the government announced interest-subsidy facility. Prime Minister Sheikh Hasina has already announced Tk 30,000 crore package for big industries and the service sector with a 4.5 per cent in subsidy. Under another package Tk 20,000 crore was allocated for small and medium enterprises, including cottage industries with a 5 per cent subsidy. The banks would be entitled to get fund from the central bank's refinance scheme at 4 percent interest. Banks in this regard would get 50 percent as refinance from the BB against the loan they disburse to affected industry and service sector entities.  

Managing Director of Sonali Bank, Ataur Rahman, told The Business Post that the meeting discussed the current situation the banks are under and the future course of action to overcome the situation. He said that the banks will operate as per the BB directive and will allocate fund to different sectors as per direction.  

The meeting also discussed the earnings of the banks which are expected to reduce due to the ongoing situation while officials are due to get full months’ salary by working only ten days a month at branches. This has also increased the cost for banks, said concerned officials. As state-owned banks are by nature operating in more branches than that of the private ones, their expenditure in this regard will be much higher, the bankers voiced.  

Managing Director of Agrani Bank, Shams-Ul Islam told The Business Post that the banks will incur costs while paying salaries. The issue was also in the meeting agenda on Thursday. Ways to provide online banking services to clients was also discussed during the meeting.   

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