Borrowing for industries slows down

Idle fund is piling up in banks because of a low borrowing demand compared to deposits.

Businessmen say a lack of necessary infrastructure and utilities for new industries have impacted the need for funds from banks.

As per central bank guidelines, a scheduled bank can lend up to 81 percent of its borrowing excepting the 19 percent to be deposited with Bangladesh Bank.

But the latest statistics of the central bank suggest the banking sector had managed to lend only 70.98 percent of its cumulative deposits.

According to a Bangladesh Bank report, deposits in banks amounted to Tk 6769.87 billion (excluding funds in inter-bank transactions) on Oct 15, when the lending stood at Tk 5030.04 billion.

It said, though deposits had increased by 13.99 percent over the last one year, growth in lending was only 10.84 percent during the period.

Dhaka Chamber of Commerce and Industry (DCCI) President Hossain Khaled told bdnews24.com that new industries were not being established as the country lacked ‘specific guidelines’ of the government on infrastructure and utilities, necessary for industries.