Concern over ‘idle money’ withdrawal

Managing directors and chief executive officers of state-owned banks have expressed concern over the withdrawal of surplus funds from the banking system by the state enterprises.

Different state-owned and autonomous organisations including Bangladesh Petroleum Corporation, Titas, Petrobangla, Wasa, Power Grid Company, and Power Development Board have recently withdrawn more than Tk1,000 crore, said insiders.

The bankers warned that such wholesale withdrawal of funds may push banks to a liquidity crisis in near future and will hamper implementing government’s stimulus packages. 

“Different state enterprises have withdrawn about Tk2,600 crore from Janata Bank in the last 20 days. It is alarming, how could we continue business if all low cost fund is taken back?” Md Abdus Salam Azad, CEO and managing director of Janata Bank, told a recent meeting with Financial Institutions Division Senior Secretary Asadul Islam.

Agrani Bank Managing Director Mohammad Shams-Ul Islam said it is a bad trend by the state agencies as they pull out money from the banks when the banks need adequate funds to continue business operation of industries.

The cabinet recently approved a draft law allowing the government to use “idle funds” of state-owned organisations for development work.

On January 20, the parliament cleared, without any major change, a bill aimed at allowing the government to use the ‘surplus funds’ of different government agencies.

Finance Minister Mustafa Kamal placed the bill with the aim to bring to the national exchequer the reserve of the government agencies, including autonomous, semi-autonomous and statutory authorities, and non-financial corporations.

There are 68 state entities which have some Tk Tk2,12,100 crore ‘idle money’ lying with different banks.

Among the 68 organisations, Bangladesh Petroleum Corporation (BPC) has the highest Tk21,580 crore of idle money deposited in banks followed by Petrobangla Tk18,204 crore, Dhaka Power Distribution Authority Tk13,454 crore, and Chattogram Port Authority Tk 9,913 crore.

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