The New Nation - Internet Edition

Staff Reporter

Credit growth in the country's private sector, rose 50 per cent to Tk 11,551 crore during the first five months of the current financial year, driven by growing demand from import and agriculture businesses.

Credit in the private sector between July and November of previous fiscal that ended on June 30, 2007 was Tk 7,700 crore, according to a Reuters' dispatch released yesterday.

"It is a positive sign, as they (private sector) are the main engine for the growth of the economy," said Murshid Kuli Khan, a Deputy Governor of the Bangladesh Bank, the central bank of the country. "The upward trend will continue further as the central bank follows a relaxed monetary policy to help economy grow," he said.

However, Bangladesh Bank Governor Dr Salahuddin Ahmed at a function in the city on Friday expressed his disappointment that the banks, particularly the private sector banks were not financing the productive sectors.

Private banks numbering 52 in total are dominating the country's banking, while there are on six Government owned banks.

"The private banks with their luxuriously decorated branches are only financing trading for quick profit leaving both the people and the productive sectors in the bay," Dr Salahuddin said, adding that financing only trading would not help grow the economy at an expected rate.

The central bank said in January it would pursue an expansionary monetary policy to ease credit facilities and would also keep a lid on inflation.

"We have asked all the banks to gear up loan allocations for agriculture, small and medium enterprises and rural infrastructure so that economy can run in its right truck to recover the losses after a series of natural calamities and also to improve the domestic supply situation," Murshid Kuli Khan said.

The army-backed interim government is ramping up production of main staple rice after floods and a cyclone of last year left it with a shortfall of up to 20 lakh tonnes.

Bangladesh is under a state of emergency since January 2007, when the interim authority took power following months of deadly political violence.

It banned all political activity, protests and disruptions -- and it has vowed to hold parliamentary elections late this year after completing a drive against widespread corruption.