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8 March, 2019 00:00 00 AM
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BB asks banks to adjust ADR limit within Sept 30

BSS, Dhaka
BB asks banks to adjust ADR limit within Sept 30

Bangladesh Bank (BB) yesterday asked the scheduled banks to adjust their Advance Deposit Ratio (ADR) or Investment Deposit Ratio (IDR) limit within September 30 this year in line with the central bank’s new rate. According to a BB circular, the banks, having ADR above the BB allowed limit, will have to submit an action plan to the central bank and will have to submit a report within the first 10 working days of every month about the progress of implementing the directive.

The central bank in January asked all the conventional banks to bring down ADR to 83.5 per cent from 85 per cent, while Shariah-based banks were asked to bring down the investment-deposit ratio to 89 per cent from 90 per cent.

The average advance-deposit ratio (ADR) of private banks came down within the regulatory limit in September last year after going past the ceiling in April.

The ratio came down to 84.38 per cent in September from 86.23 percent in April, according to Bangladesh Bank data.

Currently, banks are required to maintain an ADR of 85 per cent, meaning they can lend Tk 85 against a deposit of Tk 100.

In January last year, the BB slashed the ADR by 1.5 percentage points to 83.5 per cent in a bid to tighten banks' capacity to lend. The ratio for Shariah-based banks was cut to 89 per cent from 90 per cent.

The new rate comes into effect from March this year.

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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