Pvt sector credit growth falls in June, but remains above BB target

Staff Correspondent | Updated at 12:00am on July 25, 2018

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A file photo shows the Bangladesh Bank headquarters at Motijheel in Dhaka.-- New Age

The private sector credit growth declined further in June, the last month of the just concluded fiscal year of 2017-2018, to come down to near the Bangladesh Bank-set target of 16.8 per cent for the second half of FY18.
As per the central bank data, the private sector credit growth stood at 16.95 per cent in June while the growth rate was 17.60 per cent a month ago.
BB officials said it might be the central bank’s tightened monitoring of the disbursement of loans by the banks to contain classified loans and advance-deposit ratio that slowed down loan disbursement as a whole.
The credit growth rate was 17.93 per cent in March and 17.65 per cent in April. The rate was 18.36 per cent in January and 18.49 per cent in February.
The BB data also showed that the amount of outstanding loans to the private sector from banks stood at Tk 9,07,622 crore in June this year from Tk 8,92,403 crore in May. It was Tk 7,76,056 crore in June, 2017.
The private sector credit growth was higher compared with the BB’s projected 16.3 per cent growth for the first half of the 2017-18 fiscal that prompted the central bank to set a bigger growth target for the second half.
In FY18, the credit growth was above BB estimation in 10 month, while the growth was below 17 per cent for two months— in June, 2018 and in July, 2017 (16.94 per cent).
The domestic credit growth, however, was below the projected 15.8 per cent in the fiscal year 2017-2018 due mainly to the government’s 2.52 per cent negative borrowing from banks.
The total domestic credit grew by 12.84 per cent to stand at Tk 10,21,707 crore at the end of June.