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‘Inflation, dollar price key challenges for banking sector’

Published : 28 May 2022 10:18 PM | Updated : 29 May 2022 01:52 PM

Bangladesh Bank Governor Fazle Kabir has termed inflation and rising dollar price as the main challenges for the country’s banking sector considering the risks of the global economy.

Despite the dollar assistance provided by the central bank to control the situation, the banking sector needs to work together to tackle the crisis, he added.

He made the remarks while speaking as the chief guest at the inaugural function of Al-Arafah Bank Scholarship awarding programme at the Officers Club in the capital on Saturday.

Alhajj Salim Rahman, Chairman of Al-Arafah Bank presided over the function while Farman R Chowdhury, Managing Director and Chief Executive Officer of the organization delivered the address of welcome.

Inflation is rising in the country. According to the latest data from the state-run Bangladesh Bureau of Statistics (BBS), the overall inflation rate in the country was 6.22 percent in March.

The inflation rate hits 17-month high. Food inflation is 6.34 percent in this month while the non-food inflation is 6.04 percent.

On the other hand, the value of money against dollar is constantly declining in the country. On May 23, Bangladesh Bank reduced the value of taka by 40 paisa to Tk 87.90 against dollar. The Central Bank has depreciated value of taka three times in May on higher demand of US dollar.

The dollar rose by Tk 1.45 in three phases but banks have been given the opportunity to collect import bills at Tk 88. However, the dollar rate in the open or curb market stood up to Tk 104 against dollar. Now it sells between Tk 97 and Tk 98. 

In such a reality, the Central Bank Governor said, “Bankers have acted as front-line fighters with many challenges during the Corona period. A total of 189 bankers died of Covid-19. Now the challenge for the banking sector is inflation and the rise in the value of dollar. The central bank has taken various steps to address these challenges.”

Bangladesh Bank has imposed strict restrictions on the opening of LCs, he said, adding that, banks have been instructed to discourage imports of luxury goods. Here, all the public and private banks have to work together to tackle the crisis, he mentioned.

Mentioning that a number of banks have introduced scholarships, Fazle Kabir said that during the Corona period, the money allocated under social responsibility (CSR) was said to be spent more in the health sector, but the banks have come forward in aid of the education sector.

The governor said, “Many of our talents are lost prematurely due to poverty and various adversities. The Al-Arafah Bank Scholarship programme is undoubtedly a worthy and commendable initiative to prevent meritorious students from drop out due to financial constraints.”

However, under Company Social Responsibility (CSR), Al-Arafah Islami Bank provides scholarships to 200 students for higher education who come out successful in the HSC examination every year. This scholarship is given for four years at the undergraduate level.

Scholarships were given to 200 students who had passed HSC and equivalent examinations in 2019. Every year, under the activities of Al-Arafah Islami Bank, 800 students are awarded scholarships worth around Tk 4 crore.

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