They condemn the move as a ‘blow to press freedom’
Bangladesh Bank lowers loan-to-deposit ratio to curb lending
In an effort to curb aggressive lending, Bangladesh Bank has reduced lending limits for banks.
Published : 30 Jan 2018, 02:21 PM
Updated : 30 Jan 2018, 02:27 PM
The ceiling for the advance-to-deposit ratio or ADR that measures loans as percentage of deposits for commercial banks has been revised down by 1.5 percentage points to 83.5 percent.
For Islamic banks, it has been cut by 1 percentage point to 89 percent.
In a notice issued on Tuesday, the central bank said banks must adjust it gradually by June 30.
It also instructed banks to design an action plan and submit it to its offsite supervision department by Feb 7.
The move comes after Bangladesh Bank released its Monetary Policy Statement for the second half of the fiscal year on Monday, when it unveiled a series of measures to curb ‘overexuberance in lending’.
It, however, left key interest rates unchanged for the time being to meet the economic growth target.
The central bank said it plans to introduce “intensive and intrusive” supervision on credit flows.
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