Achieving higher growth

More investment in infrastructure stressed

Bangladesh needs to double investment in infrastructure development to achieve higher growth rate for making itself a middle-income country by 2021 and developed country by 2041, bankers said.

“To achieve the higher growth rate, credit demand in the economy has to be high,” said Director of BIMB Dr Prashanta Kumar Banarjee while presenting a paper on “BASEL III: preparation of banks in Bangladesh” at BIBM auditorium at Mirpur in the capital yesterday.
Basel III framework is basically the response of the global banking regulators to deal with the factors specifically those relating to the banking system that led to the global economic crisis.
Financial inclusion, which both the government and the Bangladesh Bank are driving, will bring million of low-income households into the formal financial system, he said adding “All these people need credit”. 
He further said Bangladesh is expecting to shift increasingly from trade and services to manufacturering. 
For understanding and implementing Basel III, there is no alternative but building capacity of the manpower and retaining them in banks, according to BIMB. Moreover, technological support is also necessary in this respect. Bangladesh Bank has given directions to the banks to implement Basel III and increase the amount of capital from January 1, 2015 in phases. As per this direction, at the beginning of 2019, Bangladeshi banks will complete the process of injecting additional capital when Basel III will be implemented fully. 
BIMB said Bangladeshis banks are almost prepared to implement Basel III as per the road set by BB. However, it is felt that a number of challenges ahead to implement Basel III successfully as per the tune of bank for International settlement.
According to the presentation –the capital adequacy of the entire banking sector recorded a minor decline in 2014 and 2015, compared with that of the previous years, as evident from the movements of capital to risk-weighted asset ration (CRAR). 
It said that both private commercial banks and foreign commercial banks are successful in maintaining required CRAR.
More acute situation has been observed in case of specialized group of banks as these banks were continuously maintaining negative percentage of CRAR and it was showing worst situation gradually. 
In 2015, the figure reached 31.95 per cent, which is quite alarming. Capital to risk-weighted asset ratio of private commercial banks showed a steady growth trend over the period and foreign commercial banks are showing very healthy trend of CRAR over the period.
Deputy Governor of Bangladesh Bank Abu Hena Mohammad Razee Hasan, Director General of BIMB Dr Toufic Ahmad Choudhury and other seniors officials of different commercial bank spoke at the programme. 

Achieving higher growth

More investment in infrastructure stressed

Bangladesh needs to double investment in infrastructure development to achieve higher growth rate for making itself a middle-income country by 2021 and developed country by 2041, bankers said. To achieve the higher growth rate, credit demand in the economy has to be high, said Director of BIMB Dr Prashanta Kumar Banarjee while presenting a paper on BASEL III: preparation of banks in Bangladesh at BIBM auditorium at Mirpur in the capital yesterday. Basel III framework is basically the response of the global banking regulators to deal with the factors specifically those relating tothe banking system that led to the global economic crisis. Financial inclusion, which both the government and the Bangladesh Bank are driving, will bring million of low-income households into the formal financial system, he said adding All these people need credit. He further said Bangladesh is expecting to shift increasingly from trade and services to manufacturering. For understanding and implementing Basel III, there is no alternative but building capacity of the manpower and retaining them in banks, according to BIMB. Moreover, technological support is also necessary in this respect. Bangladesh Bank has given directions to the banks to implement Basel III and increase the amount of capital from January 1, 2015 in phases. As per this direction, at the beginning of 2019, Bangladeshi banks will complete the process of injecting additional capital when Basel III will be implemented fully. BIMB said Bangladeshis banks are almost prepared to implement Basel III as per the road set by BB. However, it is felt that a number of challenges ahead to implement Basel III successfully as per the tune of bank for International settlement. According to the presentation the capital adequacy of the entire banking sector recorded a minor decline in 2014 and 2015, compared with that of the previous years, as evident from the movements of capital to risk-weighted asset ration (CRAR). It said that both private commercial banks and foreign commercial banks are successful in maintaining required CRAR. More acute situation has been observed in case of specialized group of banks as these banks were continuously maintaining negative percentage of CRAR and it was showing worst situation gradually. In 2015, the figure reached 31.95 per cent, which is quite alarming. Capital to risk-weighted asset ratio of private commercialbanks showed a steady growth trend over the period and foreign commercial banks are showing very healthy trend of CRAR over the period. Deputy Governor of Bangladesh Bank Abu Hena Mohammad Razee Hasan, Director General of BIMB Dr Toufic Ahmad Choudhury and other seniors officials of different commercial bank spoke at the programme.