Bangladesh is having the largest forex reserves at US$ 44.1 billion in South Asian region which is only second to India.
The huge reserves is sitting almost idle has recently led to weighing whether the government can use it for funding mega project or corporate houses can borrow to finance private sector projects. Such suggestion sounds quite risky for safety of the fund but insiders said a private corporate house has already made a plea for US$ 900 million loan to set up a big power project.

The source said borrowing from the central bank may require a mediator bank which will work as liaison for loan sanctioning and give guarantees to loan repayment. The private loan application has been reportedly made through a state owned bank.
Bangladesh Bank executive director and spokes person Serajul Islam told the Daily Observer on Thursday that he is not aware of any such move. In fact this is not a situation to indulge in such talks.
He said our reserves are now at all time high. It is atop Pakistan, Bhutan, Nepal and Maldives. Country like Pakistan has only $13 billion reserves.
He said global lenders now treat Bangladesh with respect in the light of the high reserves. Especially donors now don’t unnecessarily maneuver in loan negotiations unlike placing tough condition in the past.
He said this change in their outlook occurs in recent past based on their belief that Bangladesh is now capable to repay any loan entirely with no risk for lenders.

Insiders said Bangladesh Bank’s huge investment of idle reserves at 1 or 2 percent interest in foreign banks is not rewarding. But the reserves are not government property to use it anyway one would like.
Those promoting the proposal for use of reserves for funding big public or private sector project hold the view that lending for development project or commercial projects will be highly rewarding at the end.
Serajul Islam said the central bank may allow the reserves for funding mega projects like Padma Bridge which would evidently generate huge income and to be capable to make 100 percent return of the investment. Otherwise, reserves can’t be used this way except for external loan settlement and repaying trade bills.
He said anyone can seek bank loan from any bank and also from the central bank. But borrowing from the central bank is not permissible yet. If and when it will be allowed the central bank will set up guidelines and the modus operandi how to operate it.
It is true, he said a committee at central bank is examining the possibility based on an earlier suggestion by Prime Minister Sheikh Hasina whether it can be used for development financing.