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BSS-26
INTEREST RATE-BUSINESS LEADERS
Business leaders for implementation of single digit interest rate
DHAKA, Dec 28, 2019 (BSS) – Welcoming the decision for lowering down the bank interest rate to single digit for the manufacturing sector, the country’s top business leaders have strongly suggested for ensuring strict monitoring by the central bank to properly implement this rate.
The Bangladesh Bank Governing Board at its meeting on December 24 decided that all banks in the country will charge a maximum of 9 percent interest rate in providing industrial loans from January 1 next to the manufacturing sector.
Central bank Governor Fazle Kabir presided over the meeting while Finance Secretary, Financial Institution Division Secretary and National Board of Revenue (NBR) chairman, who are also board members, attended the meeting.
All kinds of industrial loans, including working capital, will come under the new rate. The central bank is likely to issue a circular in this regard within one or two days.
The central bank’s new decision came against the backdrop of recent remarks of Finance Minister AHM Mustafa Kamal who said all the banks would follow a single-digit interest rate from the first day of the New Year.
Talking to the BSS, President of FBCCI Sheikh Fazle Fahim welcomed the decision taken by the Bangladesh Bank.
“It was a long standing demand from us to bring down the bank interest rate to single digit. The central bank has now brought it to a structure through fixing the interest rate to single digit. We welcome this decision,” he said.
The president of the country’s apex trade body also reminded that all concerned stakeholders should keep this in mind that the businesses of the banks do not face a setback while making effective this decision.
He also suggested for reorganizing the banking sector to make sustainable this decision of the central bank which is investment-friendly.
Fahim said, “We’ve been demanding for long for the ease of doing business as well as reducing the cost of doing business. At the same time, we’re also raising our demand so that the banks can continue their businesses. For this, the entire banking sector needs to be reorganized.”
Former President of the DCCI Abul Kasem Khan also welcomed the decision for lowering down the bank interest rate to single digit.
Kasem, and also the Director of country’s one of the leading business conglomerates AK Khan Company Ltd, said, “We’ve long been raising the issue that the bank interest rate in Bangladesh is high. If the cost of doing business not declines, then the businessmen will not get encouragement for making investment under the current context.”
Suggesting the central bank to keep attention so that the maximum 9 percent bank interest rate lasts long, Kasem said that this rate should have to be implemented properly.
He said that the central bank would have to take some steps to make effective such kind of decision under the free market economy.
“It won’t work if some banks comply with the decision and others don’t……..that’s why the central bank will have to check the balance sheets of the banks regularly side by side will have to ensure strict monitoring,” he added.
The former DCCI President also opined that once the single digit interest rate becomes effective, the private sector investment will witness a rise while the investment environment would also improve.
“Side by side, we’ll also have to ensure that the bank loans go to the manufacturing sector and the small and medium entrepreneurs get such facility.” he added.
Bangladesh Chamber of Industries (BCI) President Anwar-ul Alam Chowdhury Parvez termed the decision to lower the bank interest rate to single digit as “very much positive”.
He said this would definitely lower the cost of doing business as well as would motivate the investors and thus there will be industrialization in a speedy manner.
Parvez also suggested the central bank to have strong vigil so that all banks comply with the decision and extend credit to the businesses without imposing any new condition.
Earlier on December 18 after the meeting of the Cabinet Committee on Public Purchase, Finance Minister AHM Mustafa Kamal mentioned that lowering the interest rate to a single digit would ease many tasks for the industries, especially the manufacturing sector.
BSS/SPL/RI-GM/MRU/1836hrs