BM Desk : Deposit growth in Bangladesh’s banking industry has slowed to 7.44 percent. Because of this, Bangladesh Bank has ceased making daily loans. Bangladesh Bank has adjusted the cash reserve ratio (CRR) with the central bank against deposits in such a scenario.
According to the revised regulations, only 3% of the total will be deposited every day starting tomorrow (Wednesday), whereas previously 3.5 percent of the total had to be deposited as CRR against deposits. The quantity of investable funds held by banks will rise as a result.

Bangladesh Bank has given this instruction in a notification on Tuesday (March 04). The notification said that currently, all scheduled banks in Bangladesh (including Islamic Sharia-based banks) have to deposit at least 4 percent of their total demand and term deposits on a two-week average basis and at least 3.5 percent on a daily basis in cash with Bangladesh Bank.

The decision has been changed to further consolidate liquidity management. The changed rate will be effective from March 5. Under the new rules, the cash deposit reserve ratio will be at least 3 percent on a daily basis and will remain unchanged at 4 percent on a two-week average basis.

A central bank official said that the International Monetary Fund (IMF) has suggested modernizing the monetary policy framework in terms of loans. This decision has been taken in line with this.

According to him, banks are no longer able to borrow money on a daily basis. For the next 14 and 28 days, they won’t be able to borrow money. Consequently, the daily deposit has been lowered, while the two-week deposit has remained unchanged.