Dhaka, Bangladesh (BBN) - Credit growth to the private sector increased slightly in November as rising trend in trade financing along with higher imports of capital machinery, bankers said on Tuesday.
The private sector credit growth rose to 12.67 per cent in November 2014 on a year-on-year basis from 12.12 per cent in October last. It was 11.15 per cent in September 2014.
Total outstanding private sector loans stood at BDT 5,310.51 billion as of November 2014 against BDT 4,713.19 billion in the corresponding period of the last year, according to the central bank statistics.
“The rising trend of private sector credit growth continued in the last two months of the last calendar year. But it may fall in this month if the political turmoil continues,” a senior official of a leading private commercial bank (PCB) told BBN in Dhaka.
He also said most of the banks are offering lower interest rates on lending only for priority customers who now prefer foreign currency loan from overseas sources to expedite their credit flow.
“Some banks have already slashed interest rates on lending aiming to increase their credit flow to the private sector in line with the central bank advice,” the private banker noted.
The Bangladesh Bank (BB) earlier advised the banks to take necessary measures for boosting disbursement of credits to the private sector in line with the ongoing Monetary Policy Statement (MPS).
The central bank has set the ceiling for private sector credit growth of 16.5 per cent including foreign borrowing while 14 per cent from local sources for the July-December period of the current fiscal year (FY) 2014-15.
The country's overall imports increased by more than 11 per cent in the first five months of the FY 15 due mainly to higher import of fuel oils and capital machinery.
The actual import in terms of settlement of letters of credit (LCs) grew by 11.36 per cent to US$16.20 billion during the July-November of FY 15 from $14.55 billion in the corresponding period of the previous fiscal, the BB data showed.
Import of capital machinery or industrial equipment used for production rose by 21.29 per cent to $1.15 billion during the July-November period of the FY 15 against $948.73 million of the corresponding period of the FY 14.
BBN/SSR/AD-13Jan15-12:41 pm (BST)