ull business continues to hit banks’ credit-deposit ratio.

The credit- or advance-deposit ratio in the banking sector remained stuck at around 70 per cent in the recent months due to a dull business situation amid political unrest and uncertainty, said Bangladesh Bank officials. According to the latest BB data, the ADR in the banking sector stood at 70.79 per cent as of February 19, 2015 compared with that of 70.84 per cent as of January 30, 2014. The ADR was 74.01 per cent as of June 13, 2013, 76.59 per cent as of December 31, 2012 and 80.33 per cent as of June 7, 2012. A BB official told New Age on Thursday that the businesspeople had adopted a ‘wait and see’ approach for long to expand their business by getting credit from banks due to the political unrest that hit the ADR in the banking sector. ‘We earlier hoped that the country’s business situation would get tempo since the second half of financial year 2014-15. But, the business sector is yet to get the momentum due to the recent spates of political violence,’ he said.

The opposition parties led by the Bangladesh Nationalist Party called blockade for an indefinite period coupled with several hartals since the first week of January 2015 that put a major set-back in the country’s financial sector, the official said. The country’s political sector has been facing the crisis since the late 2014 due to the one-sided national polls held on January 5, 2014 in which majority number of the political parties did not take part, he said. For this reason, the ADR, one of the most important business indicators for the banks, has been hovering at the range of 70 per cent since December 2013. A significant number of banks failed to achieve their expected net profit in the concluded year and they will suffer the same if they see dull ADR also in the months to come, the BB official said. As per BB rules, the conventional commercial banks are not allowed to invest more than 85 per cent of their deposits while Islamic banks and Islamic wings of the conventional commercial banks can invest up to 90 per cent of their deposits. A number of banks had crossed the ADR limit in 2011 and 2012, violating the BB rules but the situation later changed totally as the credit demand from the private sector continued to decrease, the BB official said.

The BB data showed that the ADR in 16 out of 56 banks declined below 70 per cent as of February 19 of this year. The 16 banks are Sonali Bank (44.53 per cent), Janata Bank (61.44 per cent) Agrani Bank (60.64 per cent), Rupali Bank (54.05 per cent), Uttara Bank (62.23 per cent), Prime Bank (63.32 per cent), Jamuna Bank (62.29 per cent), BRAC Bank (66.99 per cent) Modhumoti Bank (54.32 per cent), Standard Chartered Bank Bangladesh (63.62 per cent), State Bank of India (46.38 per cent), Woori Bank (48.03 per cent), Citibank NA (40.48 per cent), HSBC (52.29 per cent), Habib Bank (64.86 per cent) and Bangladesh Development Bank (66.64 per cent).

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