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Wednesday, July 1, 2020 11:14:05 PM
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Bankers‘ concerns are not unfounded

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02nd-Jul-2020       
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IT is really unexpected that the implementation of the government stimulus package designed to help recover the economy and restore employment in affected businesses and industries due to prolonged impact of coronavirus pandemic is facing backlash because banks are not convinced and coming enthusiastically.
 The fact is that the stimulus packages built on bank loans are dependent on close cooperation of banks. It is not the government money to use, it is bank money and they are hesitant and dallying in coming up with loan plans for their approval by the central bank.
The Tk 1,03,117 crore stimulus package is a huge amount and identifying right borrowers and applying right loan procedure are also highly critical. But above all the bankers' apathy to risk so much of their fund at interest rate half to be paid by the government and other half by borrowers is highly complicating and impacting bankers with a spell of uncertainty. The government wants distributing the stimulus packages in two months from now.
As the slowdown continues, FBCCI president who speaks for the entire trade and industry last week used critical language to banks and said if they don't come forth immediately with loan cases for approval by the central bank, he would ask the government to withdraw deposits from those banks. It seems to be a big threat but it is also highly critical how bank would save their funds.
 Insiders said only 75 large companies so far got loan approval from the central bank to receive low-cost loans under a Tk 30,000 package dedicated to big borrowers in the industrial and service sector. But Tk 20,000 crore low-cost funds for the country's cottage, micro, small and medium enterprises (CMSME) under the stimulus package is yet to be utilized or loan cases yet to be processed. This is because banks are reluctant to providing loans to small entities as they think such loans are too risky.
We would like to say a strong monitoring committee should supervise everything so that the stimulus package can achieve the goal.  

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