Three challenges ahead for banks | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Get the Paper
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Thursday
July 17, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Get the Paper
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
THURSDAY, JULY 17, 2025
Three challenges ahead for banks

Banking

Mashrur Arefin
31 December, 2020, 11:00 am
Last modified: 31 December, 2020, 11:00 am

Related News

  • Structural flaws to weigh down Bangladesh's banking sector, says S&P Global analyst
  • City Bank and IBA partners to launch executive leadership development programme
  • City Bank hosts national bamlco conference
  • City Bank holds 42nd AGM, declares 25% dividend
  • How banks made record profits in a depressed year

Three challenges ahead for banks

The whole world's economic growth now hinges on stimulus, unemployment benefit and loan repayment deferrals

Mashrur Arefin
31 December, 2020, 11:00 am
Last modified: 31 December, 2020, 11:00 am
Photo: City Bank Managing Director Mashrur Arefin/TBS
Photo: City Bank Managing Director Mashrur Arefin/TBS

Number one challenge for the banking sector in 2021 is the uncertainty around a prolonged Covid-19 pandemic. The whole world's economic growth now hinges on stimulus, unemployment benefit and loan repayment deferrals. As recovery and employment generation will take time, we don't know what will happen when the government's stimulus and loan deferrals are stopped. 

We are heavily dependent on readymade garment (RMG) exports. Moreover, Bangladeshi taka is in strong position against dollar now. The RMG sector may lose competitiveness with this strong position of taka. Due to global economic impact, Bangladeshi factories are running at 60-70% capacity. Retailers and foreign brands placed 30% fewer work orders for December-March 2021 season.

The second most important challenge will be how to manage non-performing loans (NPL). NPLs stood at Tk944.40 billion as of September, 2020, down by 1.74 percent from June 2020, and by 18.73 per cent from last year's. This has happened as Bangladesh Bank has redefined the classified loans. We fear that after lifting the relaxed loan classification rules, banks may be overburdened with additional Tk600 billion worth of NPLs.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

The third biggest challenge will be to manage the profit margin. We are now working under interest rate capped at 9%. Big corporates with their high bargaining capacity are getting rates even below 9%. To maintain the margin, we are decreasing deposit rates. In that case, deposit may fly away from the banking sector. The current excess liquidity (approx Tk1840 billion), I fear, will be shrinking fast. Overall, due to reduced margin, new NPLs and flight of deposit, banks may face risk of insignificant profit or loss of capital.

Finally, too much regulation is another challenge. We simply don't know what's coming next from the regulators. Specially in our country the whole stimulus package is dealt by banks. As a result the whole credit risk is shouldered by banks. 

At City Bank, we are giving top priority for the safety and security of our human resources during the pandemic. We are also keeping a sharp eye on the stressed loan portfolio and on how to further reduce the cost of deposit and operating expenses. Going digital for every products and services is a good way to counter the rising cost of things. Digital solutions are inarguably cheaper.


Mashrur Arefin, Managing Director & CEO of The City Bank Limited

Economy / Top News / YE 2020

Mashrur Arefin / The City Bank / City Bank / banking sector in Bangladesh / Banking Sector of Bangladesh / Banking sector

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Illustration: TBS
    FY26 monetary policy: To ease when is the question
  • Empty roads amid curfew in Gopalganj on 17 July 2025. Photo: TBS
    Tense calm in Gopalganj as 22-hour curfew underway following at least 4 killed in clashes
  • Infograph: TBS
    May deposit growth falls below 8% again

MOST VIEWED

  • 131 foreigners were denied entry into Malaysia by their border control. Photo: The Star
    96 Bangladeshis denied entry at Kuala Lumpur airport
  • Double-decker school buses are lined up in a field in Chattogram city. The district administration has proposed modernising the buses to ensure security and convenience for school students. Photo: TBS
    Country's first smart school bus in Ctg faces shutdown amid funding crisis
  • A file photo of people boarding the government-run Betna Express at a railway station. The train operates on the Benapole-Khulna-Mongla route via Jashore. Photo: TBS
    Despite profitability, Betna Express rail service handed over to pvt sector
  • Bangladesh Bank buys $313m more in second dollar auction in three days
    Bangladesh Bank buys $313m more in second dollar auction in three days
  • Representational image. File Photo: Syed Zakir Hossain/TBS
    Malaysia grants Bangladeshi workers multiple-entry visas
  • People enter and loot Ganobhaban, the Prime Minister’s residence, following the resignation of Sheikh Hasina in Dhaka, Bangladesh, on August 5, 2024. Photo: TBS
    Govt to spend Tk111cr to turn Ganabhaban into July Mass Uprising Memorial Museum

Related News

  • Structural flaws to weigh down Bangladesh's banking sector, says S&P Global analyst
  • City Bank and IBA partners to launch executive leadership development programme
  • City Bank hosts national bamlco conference
  • City Bank holds 42nd AGM, declares 25% dividend
  • How banks made record profits in a depressed year

Features

Abu Sayeed spread his hands as police fired rubber bullets, leading to his tragic death. Photos: Collected

How Abu Sayed’s wings of freedom ignited the fire of July uprising

1d | Panorama
Illustration: TBS

Open source legal advice: How Facebook groups are empowering victims of land disputes

2d | Panorama
DU students at TSC around 12:45am on 15 July 2024, protesting Sheikh Hasina’s insulting remark. Photo: TBS

‘Razakar’: The butterfly effect of a word

2d | Panorama
Photo: Collected

Grooming gadgets: Where sleek tools meet effortless styles

3d | Brands

More Videos from TBS

NCP leaders safely in Khulna from Gopalganj.

NCP leaders safely in Khulna from Gopalganj.

11h | TBS Today
July 16 returns with sadness and pain

July 16 returns with sadness and pain

11h | TBS Today
China's economy not hit by Trump's tariff war

China's economy not hit by Trump's tariff war

12h | Others
News of The Day, 16 JULY 2025

News of The Day, 16 JULY 2025

14h | TBS News of the day
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net