Dhaka, Bangladesh (BBN) - The central bank of Bangladesh is mobilising BDT 410 billion from 17 cash-rich banks to support a BDT 600-billion stimulus package aimed at reviving private-sector investment and economic activity.
The central bank will take the funds as placements, generally known as deposits, for at least three years at the 9.50% policy rate, while providing the remaining BDT 190 billion from its own resources.
In banking, 'placement' generally means placing surplus funds with another bank or financial institution for a specified period and at an agreed interest rate.
The 17 banks are Sonali, BRAC, City, Pubali, Dutch-Bangla, Eastern, Bank Asia, Agrani, Rupali, Mutual Trust, Uttara, Prime, National Credit and Commerce, Mercantile, Trust, Jamuna and Southeast.
The package targets some of the economy’s weakest areas:
→ BDT 200b for closed industrial and services-sector enterprises
→ BDT 50b for CMSMEs
→ BDT 100b for agriculture and rural activities
→ BDT 30b for export diversification
→ BDT 30b for developing the northern region as an agricultural hub
However, the initiative addresses a key dilemma in Bangladesh’s banking sector: banks have excess liquidity, but private-sector credit demand remains weak and lenders remain cautious amid elevated NPLs and economic uncertainty.
By shifting surplus liquidity towards targeted refinancing and pre-financing schemes, the package could help restart closed businesses, stimulate investment and generate employment.
Actually, effective implementation, borrower selection, recovery mechanisms and banks’ willingness to take productive-sector credit risk will determine the ultimate impact.
The private sector is expected to access the facilities at an average interest rate of7.0%, creating a significant interest-rate advantage for targeted borrowers.
The real test now is execution: whether BDT 600b can translate from liquidity support into actual investment, production and jobs.
BBN/SSR/AD