BB reluctant to disclose info

Staff Correspondent: People need various information to know the state of the country’s economy and the state of the banking sector. This information is published by various regulatory agencies of the country. One of the regulatory agencies is Bangladesh Bank. The Central Bank publishes updated information on various financial indicators of the country’s economy and banking sector on weekly, monthly, quarterly, semi-annual and annual basis on its website.
However, since the current governor of Bangladesh Bank has joined, he has shown reluctance to disclose various information including interest rates on product-based LCs, industrial loans, SME loans and bank-based loan-deposits. Some information has not been released for almost two years. Again, some information is not disclosed for one month to six months.
According to the website of Bangladesh Bank, Bangladesh Bank has not disclosed the LC or letter of credit information of product-based imports for almost two years. The BB last published information on product-based loans in July 2022. After that, the information on product-based import credit was not updated. Before this, the previous month’s information was given on the website every month.
Officials of the central bank said that there is a dollar crisis in the country in 2022. At that time, the government and Bangladesh Bank tightened the import. Due to the austerity, many imported goods are reduced. In order not to reveal the news of reduced import of goods, the supply of information is stopped, so that the situation does not worsen.
The analysis also shows that the central bank has not disclosed the data of bank-based deposits and loans for the last six months. The latest bank-based deposit and loan interest rate data has been published in October 2023. After that no more bank based deposit and loan information was updated. But earlier every month the data of the previous month was given on the website of Bangladesh Bank Statistics Department.
Besides, the central bank is showing reluctance to disclose information on industrial loans and SME loans. Bangladesh Bank published these data every three months. The agency has released data on industrial loans up to the first quarter of 2023 (January-March) at the latest. After crossing four thresholds, no information was released. Similarly, the central bank has stopped publishing information on SME loans. The agency last released data on SME loans for the December quarter last year.
Moreover, Bangladesh Bank used to publish information about the amount of deposits and loans in the banking sector. Although the company has not disclosed it since February.
On the other hand, every month Bangladesh Bank publishes the six-month moving average rate of treasury bill or smart data of bank loans. However, it did not release the rate information for April. Because of this, it is not clear how much the loan interest will be this May.
For example, Bangladesh Bank had announced on the last day of March that what will be the interest rate of bank loans at customer level in April. It is informed by calculating the average of the treasury bills of the previous six months including March.
It was 10.55 percent that month. A 3 percent margin is added to this to determine the interest rate for the April loan. However, the bank loan interest rate for May has not been determined due to non-disclosure of April smart data.
Regarding the non-updation of loan interest information, an official of Bangladesh Bank said that the existing system of interest rate determination at the customer level is becoming ‘smart’. Interest rates are fully market based as per International Monetary Fund (IMF) conditions. An announcement in this regard may come in the monetary policy committee meeting on May 8. For this reason, no more information is being released.
When asked about the update of the information to the Executive Director and Spokesperson of Bangladesh Bank, Majbaul Haque, he said that these should be updated regularly. But the reason why it is not happening, should be told by talking to the concerned departments.
Center for Policy Dialogue (CPD) Honorary Fellow Dr. Debapriya Bhattacharya said, “If information is not disclosed regularly, people’s belief about the bad state of the economy will be strengthened,” he said. People will start to believe that the country’s economy is really bad, which is why these facts are not being disclosed. Beyond that another thing will happen. That is, the self-interested groups, which are usually called syndicates, will have the opportunity to take various benefits by controlling the country’s market. Because they will somehow get this information and destabilize the market. By not disclosing the information, the regulatory body can in many cases play the role of aiding the syndicate.