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The Bangladesh Bank (BB) Governor Salehuddin Ahmed asked the bankers Thursday to discourage financing in the unproductive items like luxurious cars under their consumer credit schemes.
The governor also stressed the need for more investment in productive sectors including small and medium enterprises (SMEs) for creating employment to reduce the ever-growing joblessness in the country.
"Don't encourage purchasing cars with bank finance," Salehuddin said while inaugurating the annual managers' conference of the City Bank Ltd in the city.
He also said purchasing car in the country has become easier compared to other neighbouring countries including India and Pakistan.
The central bank has already tightened its monetary policy by raising the rate of general provision against the amount of loan for consumer financing.
Under the existing guidelines, the banks will have to maintain five per cent general provision instead of the two per cent earlier against unclassified loan amount for consumer credit.
The BB took the move against the backdrop of significant rise in the private sector's credit by 3.40 per cent in the first quarter of the current fiscal compared to the same period in previous fiscal.
The BB governor advised the bankers for taking measures to increase financing in the rural economy through expending their branch networks in rural areas.
"We will allow Upazila branches as a rural branch of the bank concerned in the near future by fulfilling certain conditions," Salehuddin said, adding that the central bank will issue a circular in this connection shortly.
Managing Director (MD) of the City Bank Abbas Uddin Ahmed said the bank will attain top position among the first generation banks in the near future.
"We want to be the largest among the first generation banks within the next two years," he added.
He also described latest performances of the financial institution that has ultimately come out from the list of the problem banks last month.
"We had initiated crash programmes to come out the problem bank list in 2001, when the bank suffered a provisioning shortfall of Tk 1.0 billion, which has now shot up to a surplus of Tk 100 million," he noted.
Chairman of the board of directors of the bank Deen Mohammad and Vice-Chairman Aziz Al-Kaiser also spoke in the inaugural session of the three-day conference.
The City Bank Limited, the country's first private bank, came into being in 1983 with an authorised capital of Tk 400 million under the entrepreneurship of 12 prominent businessmen of the country.
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