Banks have capacity to lend due to low loan demand
Representational image. Picture: Collected
The banking sector has the capacity to lend this amount because loan demand will remain low during the coronavirus outbreak.
However, banks will face a tight liquidity pressure if the government starts borrowing from the banking system.
The Bangladesh Bank must supply more liquidity in the market to enable banks to lend.
The government will have to slow down implementation of projects to reduce borrowing pressure on banks for keeping the banking sector afloat.
Bankers will have to prepare for efficient money management to face the upcoming situation because a certain portion of it will likely not return.
