Just about all private banks reluctant to supply long-term loans to industries
Most of the private banks are reluctant to provide long-term loans to large and large industries, affecting industrialisation and professional projects in the united states.
Although government has introduced a single-digit lending rate to inspire investment, the commercial sector is hardly getting any take advantage of the system as a result of non-public banks’ reluctance in financing large industrial projects.
Despite the fact that private banks are acquiring numerous facilities including deposits from the federal government, almost all of the private banks have no interest in investing money in the industrial sector.
Except for six authorities or specialized banks, most of the country’s 67 banks are in the individual sector. The federal government approved a big number of banking institutions in the personal sector in order that they can contribute to the national economy and rapid industrialisation.
Even though the federal government is putting efforts into establishing 100 monetary zones to flourish industrialisation and generate latest jobs, the investors need long-term financial support to determine fresh industries in those monetary zones.
But industrialists said exclusive banks are reluctant to supply long-term loans to them. Even most of the private banking institutions reject or linger the proposals for syndicated loans.
In that situation, four state-owned banking institutions ---Sonali, Agrani, Janata and Rupali Bank are overburdened by giving long-term loans to industrial projects.
Besides, the state-owned banks have limitations as they have to follow the rules related to the single borrower publicity limit.
Top officials in state-owned banks feel that private banks need to come forwards alongside the government-run banking institutions to react to the requirements of the exclusive sector for fulfilling the government’s vision for progress and planned industrialisation.
Industry insiders said the industrialists experience invested huge cash to use their factories through the pandemic.
But now they are facing multifaceted problems in getting support from banking institutions for materialising new expense plans. It is becoming tough for shareholders to receive long-term loans for industrialisation.
“Most of the banking institutions excluding the state-owned banking institutions aren't ready to provide loans,” entrepreneurs said, adding that they need to depend on state-owned banks for long-term loans.
“State-possessed banks have limitations while individual banks are keen to provide easy loans just like SME, personal and consumer loans,” they said.
In terms of professional loans, non-public banks are interested in providing operating capital, which will not contribute many to establishing innovative industries. Performing capital is mainly used for investing in machinery, recycleables or paying salaries.
According to Bangladesh Lender figures till March, the full total level of loans in the country’s banking system is around Tk 11 lakh crore. Of the amount, Tk 3 lakh crore provides been provided to the individual sector as long-term loans. Interestingly, a lion part of the long-term loans has got been supplied by the state-owned banks.
The government approved private banks to support investment in the private sector, but these banks have terribly failed in supporting latest investment in the united states.
Past President of FBCCI Abdul Matlub Ahmad stated that long-term loans are incredibly crucial for commercial investment in fact it is very tricky to determine factories without long-term monetary support.
“It seems that the private banks have been approved to accomplish business for a brief period of time plus they are not ready to provide long-term loans,” he said, adding that separate professional banks have to be established for improving usage of long-term loans.
“It isn't possible to improve investment in the industrial sector with short-term loans. Without expenditure in the industrial sector, you won't be feasible to sustain the existing economic expansion,” said Abdul Matlub.
He likewise said industrialisation is a must to create new jobs and long-term funding is vital to boost industrialisation.
