BB moves to cut banks’ energy consumption

The Bangladesh Bank yesterday set a target for banks to cut their electricity and energy consumption for the next one year in keeping with the government's move aimed at saving power amid deepening energy and foreign exchange crises.

Banks have to cut back on their allocation for the use of petrol, diesel, gas and lubricants by at least 20 per cent, said the central bank in a notice.

The budget has to be slashed by 10 per cent in the July-December period of 2022 and by another 10 per cent between January and June of 2023.

Besides, banks will have to save 25 per cent of their budget set aside for paying electricity bills.

The funds that would be freed up from the reduction in the power and energy expenses can't be redirected to other sectors or spent, said the BB.

On July 17, the government announced a schedule for area-based power cuts to mitigate the electricity crisis amid a fall in gas supply, driven by lower imports of liquefied natural gas and inadequate local production.

The move came as Bangladesh's foreign currency reserves have come under pressure for a surge in imports and the crisis has been deepened by a fall in remittance.

Between July and May of the last fiscal year of 2021-22, import payments went up by 39 per cent year-on-year to $75.40 billion, whereas the inflow of remittance fell 15 per cent year-on-year to $21.03 billion in the full fiscal year.

Last week, the reserves stood at $39.67 billion, in contrast to $46.15 billion in December.