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The Bangladesh Association of Banks (BAB) decided Saturday to request the governor of the central bank soon for withdrawing 1.0 per cent general provision against all unclassified loans.
Besides, the BAB will urge the Bangladesh Bank (BB) Governor to introduce a clear guideline for keeping other provisions like general provision against the consumer financing.
The decision was taken at the BAB annual general meeting (AGM), held at its Banani office in the city with BAB Chairman Syed Manzur Elahi in the chair.
The meeting discussed the overall situation persisting in the country's banking sector particularly increasing the ratio of provisioning against consumer credit and introducing cash transaction reporting on the amount of Tk 0.5 million and above to the central bank.
The meeting noted that the central bank asked the banks to keep 5.0 per cent general provision against consumer credit but it did not give any guideline on whether the amount will be kept before or after the payment of taxes.
If the provision is maintained after payment of taxes, the banks will not be able to follow it because their profit will drastically drop and most of the banks will not be able to pay dividend.
"Such a situation will severely affect deposit in the banks," a senior BAB member told the FE after the meeting.
About cash transaction report (CTR), he also said these newly introduced rules would create panic among clients that would ultimately affect the banking business of the country.
The BAB, an apex forum of the country's private commercial banks (PCBs), now has 29 members out of 30 PCBs.
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