[🇧🇩] Banking System in Bangladesh

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Only 8 local banks in good shape: Bangladesh Bank report

Only eight local banks are in good condition, according a Bangladesh Bank report. The BB’s financial stability department has recently prepared banks’ health index and...

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Only 8 local banks in good shape: Bangladesh Bank report
Staff Correspondent 11 March, 2024, 00:38

A file photo shows the Bangladesh Bank headquarters in the capital Dhaka. — New Age photo

Only eight local banks are in good condition, according a Bangladesh Bank report.

The BB's financial stability department has recently prepared banks' health index and HEAT map on the basis of June 2023 ending half-yearly financial performance.

According to the BB report, 16 banks, including eight local and eight foreign banks, are in good condition.

These banks are Prime Bank, Eastern Bank, NCC Bank, Midland Bank, Bank Asia, Shimanto Bank, Jamuna Bank, Shahjalal Islami Bank, Bank Alfalah, Woori Bank, HSBC, Commercial Bank of Ceylon, City Bank NA, Habib Bank, Standard Chartered Bank and State Bank of India.

The BB report said 16 banks were in the green zone, meaning their financial health was good, whereas 29 banks were in the yellow zone, meaning their health was something in between good and fragile.

Nine banks, including four state-run ones, were in the red zone, meaning their financial health was fragile.

The nine banks are Bangladesh Commerce Bank, Padma Bank, BASIC Bank, National Bank of Pakistan, National Bank, Janata Bank, Agrani Bank, Rupali Bank and AB Bank.

The yellow zone contains two state-owned commercial banks, Bangladesh Development Bank and Sonali Bank, 19 conventional private commercial banks and eight Shariah-based islamic Banks.

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Sonali Bank’s e-Wallet recognised as best innovation

Sonali e-Wallet, the mobile app of Sonali Bank, has been recognised as the best innovation by the Financial Institutions Division of the Ministry of Finance for implementing e-governance and innovation plans for FY24.

www.thedailystar.net

Sonali Bank's e-Wallet recognised as best innovation

Sonali e-Wallet, the mobile app of Sonali Bank, has been recognised as the best innovation by the Financial Institutions Division of the Ministry of Finance for implementing e-governance and innovation plans for FY24.

Waseqa Ayesha Khan, state minister for finance, handed over an award to Md Zahirul Islam, deputy general manager of the bank, at a function at the finance ministry in the capital on Tuesday, the bank said in a press release.

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Banking sector being abused by oligarchs: CPD

Oligarchs are abusing the banking systems to achieve their goals, causing harm to good governance, transparency and accountability in the financial sector, say a number of economists and experts.

www.thedailystar.net

Banking sector being abused by oligarchs: CPD

Oligarchs are abusing the banking systems to achieve their goals, causing harm to good governance, transparency and accountability in the financial sector, say a number of economists and experts.

There is distrust in the banking sector, which impacts the entire financial sector, they said at a dialogue organised by the Centre for Policy Dialogue at a city hotel yesterday.

Bangladesh Bank's weakness in exerting its authority; influential quarters' pressure on it; frequent policy changes; lack of punitive measures against errant banks; dual policies; and inadequate merger decisions created people's distrust of banks.

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Broad reform agenda vital to restore trust in banks: CPD

The CPD said commercial banks need to be strengthened, the independence of the Bangladesh Bank should be upheld, a conducive legal environment must be created, and a banking commission needs to be set up.

www.thedailystar.net

Broad reform agenda vital to restore trust in banks: CPD

The Centre for Policy Dialogue (CPD) yesterday urged the government to reduce bad loans and establish good governance in the banking sector as part of its suggestions aimed at healing the persisting ills of the key sector.

"A comprehensive reform agenda should be devised and implemented to overcome the banking sector's ongoing challenges," it said.

The think-tank's recommendations came at a dialogue titled "What Lies Ahead for the Banking Sector in Bangladesh?" at the Lakeshore Hotel in the capital.

The CPD said commercial banks need to be strengthened, the independence of the Bangladesh Bank should be upheld, a conducive legal environment must be created, and a banking commission needs to be set up.

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Loans, deposits rise in Islamic banks despite severe liquidity crisis

Islamic banks' outstanding loans rise by 1.43%, deposits 1.27% in February than January

www.thedailystar.net

Loans, deposits rise in Islamic banks despite severe liquidity crisis
Islamic banks' outstanding loans rise by 1.43%, deposits 1.27% in February than January

Outstanding loans and deposits both increased in full-fledged 10 local Islamic banks in February this year although six of them have been facing severe liquidity crisis for more than a year.

Outstanding loans at the 10 banks stood at Tk 455,525 crore, up by Tk 6,452 crore from a month earlier, according to the latest data of the Bangladesh Bank.

At the same time, deposits in those banks hit Tk 380,066 crore, up by Tk 4,762 crore from January.

Massive loan irregularities have been taking a huge toll on six Islamic banks: Islami Bank Bangladesh, Social Islami Bank, First Security Islami Bank, Union Bank, Global Islami Bank and ICB Islamic Bank.

The rest four—Al Arafah Islami Bank, Standard Bank, Exim Bank and Shahjalal Islami Bank—have been doing comparatively well, industry insiders said.

The money being added in the form of interest has also played an important role for the increase in Islamic banks' outstanding loans and deposits in February, experts said.

Despite being in a bad shape, the problematic six are still disbursing loans, which is fuelling the outstanding loans at Islamic banks, they added.

The six have been facing shortfalls in cash reserve ratio and statutory liquidity ratio for a long time along with being hit by a deficit at their current accounts with the central bank.

Some of them continue to take liquidity support from the banking regulator, said a senior official of the Bangladesh Bank seeking anonymity.

Some Islamic banks are largely involved in loan irregularities, which have deteriorated their corporate governance, Mohammed Nurul Amin, former chairman of the Association of Bankers Bangladesh, told The Daily Star recently.​