The newly appointed managing director and CEO of Sonali Bank Limited, Md Afzal Karim, reiterated promoting 25 thousand crore taka refinance scheme introduced by Bangladesh Bank.
Such initiative was suggested by the governor of Bangladesh Bank at a recent meeting where most of the private and state run banks’ top officials were present.
Karim spoke with the Bangladesh Post in an interview about the rumours on false liquidity crisis. He briefly mentioned that the Bangladesh Government's goals is to increase the rural banking and loan system to provide the population with modern banking facilities.
Referring to a meeting held on Monday, 14th August he elaborated that the Bangladesh Bank Governor Abdur Rouf Talukder urged them to promote and adopt the refinance scheme and offer credit guaranty scheme and also support entrepreneurs of the Cottage, Micro, Small, and Medium Enterprises (CMSME) sector.
Under the 25 thousand crore refinance scheme, banks and financial institutions can charge a maximum of 7 percent interest from customers. Additionally, they will get refinancing at a 2 percent interest from the Bangladesh Bank, which will collect the refinancing amount and interest from banks and financial institutions quarterly. Moreover, BB has created a fund of Tk 2,000 crore as a credit guarantee scheme to give collateral-free loans, especially to CMSMEs.
Afzal added how this helped banks and helped them provide up to 40 percent of their disbursed loans to CMSMEs as working capital. Afzal also magnified how this essentially will allow microloan disbursement for entrepreneurs and businesses in small communities that lack money as they can't provide collateral security to the banks for applying for loans. This is bound to create economic growth in the future but, importantly, support them in less ideal situations like the current ongoing Russia-Ukraine war.
Furthermore, he urged people not to buy the rumours on liquidity crisis as the Banking system currently is relatively stable. He added that Bangladesh Bank is working to provide minority communities and small entrepreneurs with loans to grow further, emphasizing its liquidity prowess.
Sonali Bank is also approving LCs for the priority sector with food, fuel and fertilizer to maintain economic stability in the rural regions. According to him, Sonali Bank would proceed to provide the best possible services to all branches to earn trust of the common people in the current banking system.
He believes this is vital to stabilizing the economy and dismissing the rumours.
He joined the largest state-owned commercial Bank on 28th August, previously serving as the managing director of Bangladesh House Building Finance Corporation.
He is also the current chairman of BAFEDA and PDBL and has previously worked as deputy managing director of Sonali Bank and Bangladesh Krishi Bank.
