The New Nation - Internet Edition

Much has been noticed in the important National Dailies of the recent past on liquidily shortfall and sarplus liquidily of many of the operating banks mostly relating to some Private Commercial Banks.

There would not be any reason for a bank to face shortfall in maintaining the liquidily as prescribed under declared norms of the central bank i.e. The Bangladesh Bank, if banking is carried out under proper planning. Some of the private Banks go for indiscriminate lending regardless of priority sectors to make more and more profit, to keep reduced the ratio of classified loans to total advances.

This is not a good process. Bangladesh Bank often fails to analyse the actual financial position of the Banks with reference to physical operational activity and returns. Malpractices are adopted by some banks to open L/Cs without adequate margin and sometimes showing margin created by banks themselves thus raising unplanned lending to distort the discipline liquidity. Again, merchandises under import are allowed to be carried on beyond say 60-90-120 days. This encourages hoarding and price hike.

Inspecting officials of the Bangladesh Bank other than higher ranking officials often, are managed by private banks management in any way to hide many irregularities/malpractices. The matter needs appropriate measures by Bangladesh Bank to engage experienced commercial bankers even on contract basis to find our misdeeds in private banks. If private banks abide by stipulated norms of the BB and do not resort to any hide and seek policy rather engage their efforts in right and productive directions then there will be no liquidity problem. They will rather be able to pay more to the Public Exchequer and make all future investments in planned manner within ceiling prescribed by the Bangladesh Bank and in this way national economy and the society will be greatly benefited.

Therefore, I urge upon the Bangladesh Bank, and the Government in particular, to look after this with priority for public interest.

Abdul Malek

Gandaria, Dhaka.