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Extreme Distress In Non Financial Institutions

The financial crisis of the country’s non-financial financial institutions has started. These funds are being run in the inter-bank currency market. Banking sector funding crisis has resulted in lowering of deposits. It has direct impact on these organizations. Earlier, banks, where they used to fund the funds to fund the funds, are now withdrawing funds from these institutions after tapping the bank’s funds. To meet this crisis, the higher interest rates can not be collected by the current market than any other institution.

The danger is likely to take a bigger shape in front of us. Chief executives of financial institutions have sought cooperation from the Bangladesh Bank to deal with the situation. Chairman of Bangladesh Leasing and Finance Company Association (BLFCA) and Managing Director and CEO of National Housing Finance and Investment Limited M Khalilur Rahman said on Thursday that the Bangladesh Bank will have to come forward to face the financial crisis of the financial institutions. Under the refinance fund, it is necessary to consider reopening the housing fund under the fund.

As well as alternatives, tax rebate will be allowed to leave the bond. They have been demanding the National Board of Revenue for a long time. he says, Financial institutions provide huge amount of income tax every year to the government Simultaneously, there is a direct and indirect way of providing huge employment. Problems in these institutions mean less profit. If the profit is reduced, the government will get less revenue.

At the same time creating new employment opportunities will be hampered. For this, he urged concerned authorities to solve ongoing problems of financial institutions. Another financial institution, MD Naya Diganta, told that most financial institutions are in the worst financial crisis. The fundamental sources of funding of the financial institutions are directly impacting the banking crisis after the start of the crisis.

Earlier, banks could not afford to invest their surplus funds to financial institutions. Banks had surplus funds because there was no investment demand. Banks would lend financial institutions to reduce the losses. It reduced interest rates to the bottom of this stage. Where the loan market could borrow from 2 to 3 percent interest, Some banks were forced to raise funds from 5 to 6 percent interest from the banks. Many times the interest deposited more interest on deposits of less interest. But now it’s the opposite. Many banks are now facing a financial crisis due to the reduction of deposits in the banking sector. Because of this, many banks are withdrawing the funds kept by the financial institutions.

Here is a hazard.  In this situation, some financial institutions are not getting high interest deposits to meet the financial crisis. With the interest of one institution, another institution is investing in the depositors. Even before the year, deposits at the highest rate of 7 percent interest were collected, now some institutions are taking deposits of 10 to 14 percent interest. The odd competition has started in the deposit collection.

If the current situation continues, the crisis in front will be more dangerous. This issue has already been presented to the governor. According to the sources, there is a possibility of a multi-pronged crisis for financial institutions, including banks in front. Because, because the interest rate is higher in the savings table, the bank’s deposits are going to the savings bank.

In this, the growth of bank deposits is declining. In contrast, the growth of credit growth is increasing day by day. It is unlikely that credit growth is expected to be lower than the growth of the deposit under the current trend, which is not a good sign. Because, according to the norm, the amount of loan being provided is not going in the productive sector. The money is being transmitted through Hundi, or else the customer is repaid other loans. That is, the meaning of loan is not used in the right way. Deposits are decreasing due to non-utilization of loans.

And due to the decrease in the growth of the deposits liquidity surplus in the banking sector is decreasing. Earlier, where surplus liquidity was about one and a half million tk. When it came to the end of the year, it has dropped to Tk 70 billion, Deposits decreasing in this direction The banking crisis has started the crisis again. Every day, some banks are borrowing money from the central bank as well as repatriated from the bank.

Its direct impact has been on financial institutions. In the meantime, there has been a crisis of money in some banks and financial institutions. On Wednesday, Managing Director of a financial institution said that interest rates are not the main thing to him now, he needs cash. To meet the requirement, he agreed to raise the fund at 12-13 percent. MD of a bank said, before the financial institutions were kept for the money, they now have a crisis of money. That’s why money is being collected from financial institutions.

The MD is worried that the situation will become more prominent in front. In such a situation, there is no other way than looking for alternative funding for financial institutions. The top executives of this sector