Borrowing at 9 percent could be troubling for Islami, Al-Arafah and National Bank: Economists
Some private sector banks in Bangladesh are in deep crisis because of lack of adequate liquidity and are being forced to borrow money from state-owned Sonali Bank at a 9 percent interest rate to stay afloat. Islami Bank, Al-Arafah Islami Bank and National Bank are borrowing money from Sonali Bank at a 9 percent interest rate, which is the highest commercial lending rate at present. Economists and banking sector insiders say that it means the sector is passing through a hard time due to higher non-performing loans, lack of good governance and serious corruption in the management of the respective banks. They say at present the call money rate is between 6-7 percent while banks are borrowing at 9 percent rate, which proves the crisis has mounted in these banks. They also say the troubled banks have no other options, but to borrow money. Also read: 5 held for spreading rumors on social media about Islami Bank, S Alam group Both such borrowing and lending are very risky considering the ability of investment of these banks, they say. BRAC Bank Chairman Dr Ahsan H Mansur told UNB that some banks have lost their customers’ trust due to their mismanagement. “As a result, people have withdrawn money from those banks,” he said. Giving an example he said that the deposit of BRAC Bank increased by 33 percent in the last quarter while the deposit volumes of many banks decreased. Also read: Scam-hit Islami Bank earns operational profit in 2022, Basic Bank reports loss Usually, banks charge a higher interest rate to lend to other banks while considering it risky, he said. On 13 December 2022, the Sonali Bank’s Board of Directors approved the investment of Tk200 crore in fund placement in favour of Islami Bank Bangladesh Limited and Tk75 crore in favour of Al-Arafah Islami Bank Limited at a 9 percent lending rate for a period of 90 days. On the same day, the bank's Board also agreed to the proposal to extend the term of the Tk150 crore loans to National Bank for another six months at 9 percent interest subject to payment of the previous interest. It is a normal practice that when a bank faces a liquidity crisis it borrows from another bank via the interbank money market. Read More: 60% bank sub-branches must be outside city corporations, municipal areas: Bangladesh Bank But the liquidity situation in three private sector banks is so critical that they are forced to borrow from another bank at the highest commercial lending rate. According to the Bangladesh Bank's guidelines, banks can charge a maximum of 9 percent interest on all types of loans other than consumer loans such as auto loans and personal loans, in which case the highest lending rate ceiling is 12 percent. Professor Dr Abul Barakat told UNB that any short-term borrowing at such a rate is not harmful, but it could create trouble while getting such loans will be lingering. He said banks sometimes face a liquidity crisis, then it is required to borrow to meet the instant crisis. But a 9 percent lending rate for banks is high. Read More: Bangladesh Bank expects first instalment of $4.5 b IMF loan to arrive by next month: Spokesman “Then how much a bank would have to charge against any commercial loans,” he asked. Sector insiders say corruption and lack of good governance are the main reasons behind such a crisis. Some questioned the role and the ability of the central bank of Bangladesh to regulate commercial banks that fail to check corruption.
National Bank donates Tk11 crore to PM's relief, welfare fund
National Bank has donated Tk11 crore to the Prime Minister's Relief and Welfare Fund for the flood-hit people. On behalf of National Bank Chair Monowara Sikder, her son Rick Haque Sikder and daughter Pervin Haque Sikder handed over a cheque to Dr Ahmad Kaikaus, principal secretary to the prime minister, at the Prime Minister's Office Monday. Also read: PM: Connectivity is key to national development Prime Minister Sheikh Hasina joined the ceremony online. The Bangladesh Association of Banks donated over Tk300 crore to the Prime Minister's Relief and Welfare Fund at the ceremony, according to a media statement. Read AIBL donates Tk10 crore to PM's relief, welfare fund
Bank Jobs: National Bank is hiring in various positions
Private sector National Bank Limited has announced recruitment of manpower for three posts. No prior experience is required to apply for these posts. Newly graduated pass students from public / private universities can apply. Position Name: Probationary Officer Position: Not specified Educational Qualification: Post Graduate / MBM / MBA from Government / Private / Foreign University. Must have postgraduate degrees in Economics, English, Statistics, International Relations, Public Administration, Law, Mathematics, Accounting, Marketing, Finance, Banking, International Trade, MIS, AIS, HRM and Management. Apart from this, MSc / BSc pass candidates from Environmental Science, Computer Science, Electrical, Mechanical, Civil, Architecture, Agriculture and Agro-Economics can apply. GPA in SSC and HSC should be 4.50 on a scale of 5.00. Undergraduate and postgraduate CGPA should be 3.50 on a scale of 4.00. Age: Maximum 30 years Salary: While being a trainee, the monthly salary is TK.34, 500. At the end of the apprenticeship the salary will be TK. 48,500 Position Name: Junior Officer (General) and Junior Officer (Cash) Position: Not specified Educational Qualifications: To apply for the post of Junior Officer (General), the candidate must have a post graduate degree from any university. And for the post of Junior Officer (Cash) you need to have at least a bachelor's degree. GPA in SSC and HSC should be 4.00 and CGPA in undergraduate and postgraduate should be at least 2.25. Age: Maximum 30 years Salary: During the training, the monthly salary is TK. 18,300. At the end of the apprenticeship the salary will be TK.29, 900. The way the application Interested candidates need to go to the National Bank website and apply by clicking on the Career tab. CV will not be taken by post / courier / direct / mail. Last date of application: 17 December 2021 Also Read:Bank Jobs: Standard Bank Job Circular
Exim Bank files case against Sikder Group directors
Exim Bank has filed a case against two directors of Sikder Group accusing them of abduction and attempted murder of its Managing Director (MD) Haider Ali Khan and the AMD of the bank over a loan request.
National bank official among 4 remanded over missing Tk 80 lakh
A Dhaka court on Tuesday granted police one day to interrogate four people including an executive officer of National Bank, in a case filed in connection with Tk 80 lakh going missing.