TDS Desk:

The government will rescue the weak banks by any means necessary, assured Bangladesh Bank Governor Ahsan H Mansur on Tuesday (28 January).

Speaking as the chief guest at a workshop titled “Microfinance in Bangladesh 24” at the Cirdap Auditorium in the capital, he said that decisions regarding weak banks will be made within this year.

“For banks unable to return customers’ money, I assure you that the money will either be refunded or paid through bonds,” the governor said.

“I have been advising for the past ten years not to keep money in S Alam’s banks, but many chose to deposit there for an extra two percent profit,” he said.

Ahsan H Mansur stated that the next five years will be increasingly challenging for microfinance institutions.

“Currently, there are 24,000 branches of microfinance institutions across the country, while banks have around 24,000 agent banking outlets. In the next five years, banks are expected to increase their agent banking outlets to around 60,000.”

He highlighted the growing competition for microcredit institutions, noting that mobile financial service (MFS) providers are now offering loans and collecting deposits. Additionally, the emergence of digital banks will pose a new challenge for microfinance institutions.

The governor also mentioned that in the 2023-24 fiscal year, microfinance institutions disbursed loans worth Tk3 lakh crore, marking a 5.26% increase from the previous year.

Of this, Tk99,000 crore went directly to micro-entrepreneurs.