Bangladesh Bank (BB) plans to go for a sector-wise review to have a clear picture about the use of stimuli packages as there are allegations that these concessional loans are not being used in line with the government's targets.

Central bank sources said an outline has already been prepared for reviewing the implementation of incentive loan packages and BB’s departments have been instructed to conduct the review in line with the government’s guidelines.

“Bangladesh Bank will review the implementation of the incentive packages. The entire issue is in progress”, BB chief spokesperson Sirajul Islam said.

Economists said the government should take immediate steps to bring the entire implementation position of the stimulus packages under its strict monitoring so that none can use these loans for other purposes or for personal benefits.

If the incentive loan is not used for proper purposes, it will not be repaid or realised at the right time also, they observed.

Mentioning the recent rise in investments, especially in the stock market and savings certificates amid the corona period, they said there are reasons to think that a portion of the incentive money is being invested in stock market and savings certificates for quick gains.

They said instances are galore that if loans are given for a certain purpose but that are used for other purposes, such loans are not repaid by borrowers afterwards.

Economic activities in the country maintained a downward trend after the outbreak of Covid-19 in the country last March. The wheels of production and investment remained almost closed during the 66-day general holiday declared by the government.

In February, the month before the outbreak of the corona infection in the country, the amount of the deposit in the banking sector was Tk 11, 43, 896 crore (Tk 11 lakh 43 thousand 896 crore).

Former Governor of Bangladesh Bank Dr Salehuddin Ahmed said the government as well as the regulatory bodies should beef up its supervision for proper implementation of incentive packages to check their misuse because such loans are disbursed quickly as industrial sectors  need support immediately.

Former adviser to caretaker government Dr AB Mirza Azizul Islam said on the  one hand, income of people is declining and the number of poor people is increasing and  on the other, investment in savings certificates and stock market have remained vibrant, and deposits are increasing in banks.

"It is a very contradictory picture," he said, adding that there is high possibility of diverting the incentive loans to other purposes.

"A detailed investigation is needed to identify the actual situation," he added.

There was no investment in the real manufacturing-friendly sector, he said, adding that as a result, credit flow to private sector is on decline. Imports of capital equipment, industrial raw materials and intermediate products are also declining, he added.

In March, the month after the outbreak of infection, the deposits came down to Tk 11, 36, 414 (Tk 11 lakh 36 thousand 414 crore).

However, it has started growing steadily since June, with annual deposits growth at 13.27 percent in November.

In other words, in the six months from June to November, the deposits in the banking sector have increased by about Tk 1, 10, 906 crore (Tk one lakh 10 thousand 906 crore).

And in the nine months from March to November, the deposits have increased by Tk 1, 24, 104 crore (Tk one lakh 24 thousand 104 crore).

But in the nine months from March to November of 2019, the deposit increased by Tk 1, 05, 551 crore (Tk one lakh five thousand 551 crore).

Syed Mahbubur Rahman, former chairman of the Association of Bankers Bangladesh (ABB), an association of managing directors (MDs) of private banks, and managing director (MD) of Mutual Trust Bank, said earlier that there was a slowdown in private investment during this corona period, so money is being invested in banks, savings certificates and the stock market.

“Besides, many people are saving for the future by reducing the overall costs due to corona. In addition, a record amount of remittances have come to the country in corona. A part of that remittance has also entered the bank as  deposits,” he added.

According to the Directorate of National Savings, it has target of borrowing only Tk 20,000 crore from savings certificates in the current financial year. But in just five months of the financial year, net savings certificates have been sold at Tk 19,045 crore, which is about 95 per cent of the target for the entire financial year, he added.

However, in the first five months of the last financial year, net savings certificates worth Tk 5,841 crore were sold.

Apart from this, the country's capital market has been on a steady upward trend in recent times. The amount of transa