The ministry of finance on Thursday asked all state-owned banks to start procedures immediately for the implementation of relief packages the government offered to help businesses cushion the pandemic blow.
Senior secretary of the financial institutions division Ashadul Islam gave the directive in a video conference with the chief executives of the banks.
In the programme, officials said, the executives discussed the losses the banks will incur due to the spread of the deadly virus and work plan to recover that, the preparation of banks to ensure fund flow for the implementation of the packages, steps taken to disburse fund, especially for agriculture, small and medium enterprises, and microcredit sectors.
They also discussed the customised strategies taken by banks to address the challenges, what steps can be taken to monitor whether the beneficiaries of the incentives are properly using the funds, the challenges and risk factors in implementing the stimulus, and the state of liquidity after bringing the cash reserve ratio down.
The loss analysis by banks and financial institutions following the virus attack focused on whether the Karmasangsthan Bank has taken steps for employment generation, the Probasi Kallyan Bank has taken initiatives for Bangladeshi workers living abroad, whether the businesses that availed 2.0 per cent down payment facility will get benefit from the package, and the austerity measures in operating costs.
Mr Islam told the FE that he asked bank bosses to quickly implement the packages, follow the central bank's instructions, find appropriate persons, and monitor properly so that misuse of funds can be avoided.
"We want proper implementation of the stimulus packages. It's a big challenge for the banks and big responsibility too," he said.
He said the central bank has been asked to engage all the state-owned banks in the implementation of the packages.
"We don't want to disburse the Tk 1.0 trillion stimulus packages only through a few banks. If that is the case, they will be overburdened," Mr Islam added.
He also said young people are often hit hard by any recession. "The Karmasangsthan Bank works with young people. It also can be engaged in the recovery packages."
The secretary also referred to the name of Palli Sanchay Bank, which has a large number of branches across the country, and can be engaged in the disbursement of the recovery packages.
He also asked for preparing a customised plan for each bank for the disbursement of the packages.
Contacted, managing director of Bangladesh Krishi Bank Ali Hossain Prodhania said the meeting has asked the bank authority to go for quick implementation of the packages in their respective sectors.
Besides, the banks have been asked to assess how much losses they will incur due to COVID-linked troubles.
"Our responsibility is very big. I have already instructed officials concerned for the timely implementation of the package," he told the FE.
He said usually his bank makes losses owing to disbursing loans at lower than the cost of funds. "This time, due to COVID-19, our losses will mount," he feared.
Managing director of Agrani Bank Mohammad Shams-Ul Islam said the meeting has asked the banks to select "right" beneficiaries of the packages to lower risks. "This is a challenging task for the banks," he said.
Mr Islam said the meeting also discussed changing the banking trend in post-COVID-19 period when digital banking will get priority.
syful-islam@outlook.com