Stringent conditions bar most vulnerable sectors from getting liquidity support: CPD

In a bid to deal with the negative impact of Covid-19, the largest amount of liquidity support, provided by the government, has been offered to the least vulnerable.

At the same time, the most vulnerable sectors and businesses have faced the most stringent requirements and regulations to avail the support.

Centre for Policy Dialogue (CPD) has made the observation in its analysis titled “Responding to COVID-19: A Rapid Assessment of Stimulus Packages and Relief Measures.”

CPD unveiled the findings of the analysis at a virtual dialogue on Tuesday morning.

“Several loopholes have been left wide open to provide ample room for unscrupulous individuals and businesses to exploit humanitarian aid for private gain,” said the assessment report.

In order to cushion the Covid-19 blow on various sectors and people, the government has announced a number of stimulus and relief packages. These include: (a) liquidity support through banks; (b) Tk 50.0 billion emergency incentive package; (c) Tk 200 billion stimulus package as credit line support for Small and Medium Enterprises (SMEs) and (d) relief packages to mitigate the impact of Covid-19.

The think-tank said that though the banking sector is being ‘tasked with the tremendous responsibility’ of supporting businesses and individuals during the pandemic, the reality is that the country’s banking sector is ‘unprepared to deliver the Covid-19 related liquidity support packages.’

CPD also observed that most of the existing problems like high classified loans in the banking sector are likely to persist during the pandemic and even ‘get more acute.’

The think-tank also urged the authorities to take urgent steps ‘to rescue the banking sector from the quicksand of poor governance’.

It also apprehended that the entire economy may sink underground if required steps are not taken to address the problems of the banking sector.

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