Govt to bring down interest rate to single digit


14th January, 2020 06:36:25 printer

Govt to bring down interest rate to single digit

Bangladesh Bank Governor Fazle Kabir  said that the government is trying to bring down the lending interest rate to single digit which is expected to be implemented from April next for the betterment of economy, businessmen and mass people.

“The economy of Bangladesh mostly depends on the banking financial system and the government is trying to bring down the lending interest rate to single digit for the betterment of economy, businessmen and mass people which may be implemented from April next,” he said.

The central bank Governor said this when the newly elected Board of Directors of Dhaka Chamber of Commerce & Industry (DCCI), led by its President Shams Mahmud, called on him today at his office, said a DCCI press release.

Kabir said the government has also taken various infrastructure development projects where private sector’s intervention would be much appreciated.

Regarding the non-performing loans, he said there is a clear definition of willful and unintentional loan defaulter in the law. “But, if any entrepreneur failed to repay the loan due to delayed connection of power, energy, gas or delayed loan approval process or some other reasons, which have valid ground might get special consideration, he added.”

Recently the National Board of Revenue (NBR) withdrew stamp duty which will help flourish bond market system in the country.

He also stressed that Bangladesh should have a strong secondary Bond Market for long-term financing mechanism. He also sought all-out cooperation from the business community for effective and proper utilization of Export Development Fund (EDF).

Banking Reform Adviser of Bangladesh Bank SK Sur Chowdhury said for the sake of overall banking eco-system and healthy money market as well as to achieve targeted economic growth, Bangladesh Bank will amend its rules and regulations if necessary and this effort will also be continued.

Executive Directors of different departments and high official of Bangladesh Bank were present at that time.

During the meeting, DCCI President Shams Mahmud said though GDP growth of Bangladesh has achieved a new height crossing 8 percent growth trajectory, but private investment is stagnant within 22 percent to 23 percent of GDP.

The stagnant private investment is aggravated by the slow-down in the private sector credit growth which was 9.87 percent in November 2019.

“Higher interest rate on bank loan is one of the reasons for slow-down of private investment.” Shams said urging to cut down the lending rate to single digit.

In order to reduce the non-performing loan (NPL), he suggested establishing a mechanism in order to identify willful and unintentional defaulter.

Terming the SMEs as the lifeline of the industry, Shams sought access to export market, required infrastructure facility and access to finance for the SMEs.

In order to reduce the dependence on public finance and banking system finance, the DCCI President suggested that the government should develop alternative sources of long-term financing for infrastructure and industrial projects like bond market in the local capital market.

Senior Vice President of DCCI NKA Mobin, Directors Andaleeb Hasan, Arman Haque, Alhaj Deen Mohammed, Enamul Haque Patwary, Engr. Md. Al Amin, Monowar Hossain, Nuher L. Khan, Engr. Shamsuzzoha Chowdhury, S M Zillur Rahman and Waqar Ahmad Choudhury spoke at the meeting.