33 banks and 6 NBFIs face punishment

Staff Correspondent: Scheduled Banks and Non-Banking Financial Institutions (NBFIs) are lending to each other in call money (overnight) to meet the pressure of liquidity crunch. There is no need to comply with the maximum interest limit of 9.50 percent fixed by most banks. 33 banks and 6 financial institutions have transacted Tk 5,811 crores up to the maximum rate of 9.90 percent. The central bank has warned of penalties against these institutions for violating the maximum interest rate on call money. If the institutions fail to respond satisfactorily, they will face fines. At the same time, the liquidity facility of Bangladesh Bank may be canceled, according to the related sources.
By reviewing the data of Bangladesh Bank, it has been found that till last January 25, 33 banks have lent Tk 3,105 crores by violating the maximum interest limit of Tk 9.50 and at the same time they have lent Tk 2,610 crores to other banks. Similarly, 6 financial institutions broke the maximum interest limit and borrowed Tk 953.5 million at the rate of 9.90 percent. The central bank sees such transactions as against the banking policy.
It has been found that among the government banks, Janata Bank has borrowed Tk 481 crore from other banks in the call market at Tk 9.75. And Bangladesh Development Bank has also given a loan of Tk 95 crores at the same rate. And the specialized Bangladesh Krishi Bank has lent Tk 459 crores at the rate of Tk 9.90. And among foreign banks, State Bank of India has lent Tk 304 crore at the rate of Tk 9.60.
Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said that call money is a system of borrowing money from one bank to another bank. Banks that have excess liquidity essentially lend out and charge interest on it. The interest rate depends on how many days the money is being borrowed. Call money is paid under the supervision of Bangladesh Bank.
Meanwhile, Eastern Bank, SBAC Bank, Dhaka Bank, Premier Bank, NRBC Bank, Madhumati Bank, Southeast Bank, Bank Asia, Shimonat Bank, Uttara Bank, One Bank, Pubali Bank, Jamuna Bank, Meghna Bank, Community Bank have also borrowed at high interest.
In this regard, the spokesperson and executive director of Bangladesh Bank Majbaul Haque told, “The central bank will investigate before punishment.” Those found guilty of violating the rules will be punished according to law.
Meanwhile, the central bank has issued a warning of punishment among the non-bank financial institutions IDLC, DBH, PFIN, Bay Leasing, BD Finance and ICB for transacting in the call market by violating the rules.