State banks' excess liquidity to be invested in treasury bonds

Posted by BankInfo on Wed, Feb 19 2014 11:27 am

The government has taken initiative to sell treasury bonds and bills to the state-owned commercial banks in a long-term investment of the banks’ excess liquidity.

Bank and Financial Institutions Division made the decision at a meeting held on February 12. Additional secretary to the Division Amalendu Mukherjee presided over the meeting attended by the chairmen and managing directors of the Sonali, Janata, Agrani and Rupali banks.

The banking division also asked the management of the state-owned commercial banks to submit the papers on amounts of the excess liquidity, said the meeting sources.

The excess liquidity of the four banks may exceed Tk5000 crore.

However, a top official of a bank differed with the long-term investment of the excess liquidity.

Another high official said the excess liquidity had already been invested in the call money market, “so there is no excess liquidity in the banks.”

“There is some excess liquidity in the state-owned commercial banks due to a seven-month political unrest. The demand of loan fell,” said Dr Khandoker Bazlul Haque, chairman of the Agrani Bank, told the Dhaka Tribune.

He said the demand of loan will rise after the upazila elections and there would be no excess liquidity then. According to him, the liquidity should not be invested in treasury bills and bonds as “the interest rate is below 10% while the cost of fund is 15%.”

News:Dhaka Tribune/19-Feb-2014

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