DHAKA, Jan 1, 2019 (BSS) – Finance Minister AHM Mustafa Kamal today vowed to implement the single digit interest rate from April saying the government stood firm on the issue as it would boost investment in the country.
“We’ve given the bankers few months time to implement the decision (single digit interest rate) and we’ll implement it from April,” he said.
The Finance Minister was briefing reporters after chairing two separate meetings on the Cabinet Committee on Economic Affairs and the Cabinet Committee on Public Purchase at the Cabinet Division at Bangladesh Secretariat today.
The Economic Affairs Committee meeting today approved a proposal while the Cabinet Committee on Public Purchase approved four proposals.
The Finance Minister said initially there was a plan to implement the single digit interest rate for the manufacturing sector. But, after directives from the Prime Minister, this decision would now be implemented for all the sectors (except credit cards).
He said although the interest rate across the world is around 2 to 3 percent, but it is much high in Bangladesh hovering around 15 to 16 percent. “Then how come there will be speedy industrialization in the country? If single digit interest rate becomes much more effective, then investment will be boosted and everyone is waiting for it.”
Kamal said since the single digit interest rate is yet to become much more effective, the trend of Non Performing Loans (NPLs) is increasing while the level of investment is not up to the expected mark.
“Come what may, we’ll implement the decision (single digit interest rate), no matter even if we need to wait for few more days,” he added.
Earlier on Monday after a meeting with the leaders of Bangladesh Association of Banks (BAB) at its headquarters, Kamal said a decision has been taken to implement single-digit interest rate for not only the industrial sector, but also for all sectors except credit cards.
Banks will have to fix the interest rate for lending at 9 percent from April 1 while the banks will have to pay 6 percent interest on deposits.
Asked about his evaluation of the performance of the country’s economy in the last calendar year, the Finance Minister said he was happy as the most important thing was to remain in track given the situation of the world.
“Of course I’ll accomplish whatever I’ve said earlier,” he added.
The Finance Minister also hinted that he would hold a press conference on January 5 to brief the media on contemporary economic affairs.
Replying to a question, he said that the government would have to ensure good governance at the capital market as well as would have to bring to book those who would commit crime in this market.
Noting that the capital market is now better compared to the last one year, Kamal said, “As much as the economy of a country is strong, the capital market will be strong to that level. But, that thing is not taking place fully in our country and time will say the reason behind this.”
He also informed that the government has a plan to auction the number plates of vehicles to boost the revenue generation.