Public deposits for private banks increasing 25 percent

Special Correspondent: Finance Minister Abul Maal Abdul Muhith has announced that the government will keep 50 percent of pubic deposits at private banks in an effort to tackle the liquidity crisis.

“The process will be initiated immediately,” the minister said this while inaugurating the annual general meeting of state-owned Janata Bank at a city hotel on Sunday.

According to the current rules, private banks are cureently getting 25 percent of public deposits. as 75 percent of government assets are kept at state-run banks. Managing directors and chairmen from various private banks have long urged the government to make larger deposits at their institutions.

Muhith also said bankers are now agreed to bring down interest rates on banks’ deposit.

“Given the banking rules, the conditions of the country’s banks are not healthy,” he said.

“This situation has long been prevailing in the banking sector because we couldn’t create capital market for banks,” the minister said adding, “For long-term financing, we’ve permitted banks as well as established Investment Corporation of Bangladesh, but failed to make any remarkable progress in the market.”

“We’ve tried to create a bond market for long-term investment but entrepreneurs had no enough strength there. So, it couldn’t bring any change,” the minister said.

Janata Bank Chairmen Luna Shamsuddoha presided over the meeting while Bangladesh Bank Governor FazleKabir and senior secretary of the finance ministry, among others, spoke at the meeting.

 

risingbd/Dhaka/April 01, 2018/Hasnat/A K Azad