Has banks played its part? Minister Hashim

Has banks played its part in the last few years in helping the country towards the part it wants to go? questioned Minister of Public Enterprise Development Kabir Hashim at the unveiling ceremony of new corporate logo of People’s Bank.

In 2014 the average deposit rate of the six large domestic banks was something like 4.9 % and the lending rate 12.4 % which was a huge spread.

Six of the largest banks made a profit of Rs 108 billion in 2014.

“In terms of profit it looks great. But did they achieve their objective?” Hashim questioned. In 2011 the gold pawning loans rose by over 60% which was not a good sign for the country. Out of the total bank portfolios in 2013 pawning loans was 15% of the total portfolio which was not a good sign either, he opined.

But agriculture loans, SME loans did not go that fast. “We didn’t direct the banking sector to support local entrepreneurship.

We didn’t make cost of finance low enough to make our entrepreneurs competitive in international sphere. We need to look at these things in a different perspective now,” the minister insisted.

In the past the powerful, the people who had the connections could have access to cheap credit and make money out of money. But the people who mattered, the people who needed it, the people who drove the basic foundation of the economy was deprived of those facilities. “The victims were all of us because we are part of the nation,” Hashim cautioned.

This needs to be changed and that was a part of his job to steer the banks to do their job, the minister noted. The minister said he was glad that in the 2017 budget the government’s policy was made clear that banks should have a percentage of lending to the agricultural, SME and to the priority sectors to improve national production.