DHAKA, June 11, 2020 (BSS) – Finance Minister AHM Mustafa Kamal today said the government is formulating the ‘National Financial Inclusion Strategy- Bangladesh’ to streamline financial inclusion operations.
“The government has been implementing various activities to bring about reforms and development in banking, capital market, insurance and other financial sectors,” he said while placing proposed national budget for the fiscal 2020-21 in the parliament.
Considering the importance of financial inclusion, Mustafa Kamal said, Bangladesh Bank is working to ensure formalized banking facility for the disadvantaged people in both urban and rural areas.
“Mobile Financial Services have become immensely popular among the marginalised sections of the people in the country. The usefulness of MFS has been further reinforced during the COVID-19 pandemic,” he added.
Besides, the finance minister said, the agent banking program has been initiated to take banking services to rural areas in a cheaper and affordable manner.
“As of December 2019, the program has been in operation across the country through 8 thousand agents and 11 thousand 320 outlets,” he added.
He said Bangladesh Bank is also working to provide necessary assistance to the financial market to ensure the commercial success of FINTECH or the expansion of financial technology and creative financial technological initiative.
To make our industrial and business sectors more competitive, he said, the government has brought the interest rate on bank loans within the single digit.
“This new interest rate (in the case of loan, the highest rate is 9 percent) has been made effective from April 2020,” he added.
By making 2 percent down payment, the finance minister informed that borrowers were allowed to reschedule their classified loans for a period of 10 years with a grace period of 1 year.
“This step helped reduce classified loans, which has gone down to 9.32 percent of total loans in December 2019 from 11.69 percent in June 2019,” he added.
Kamal said the central database for large credit (CDLC) has been established for close monitoring of large loans and strengthening the monitoring system of banks and financial institutions.
“To main financial stability, a number of steps will be taken in the future, which includes preparation of a concept paper on macro-prudential policy, drafting a Financial Stability Map taking international best practice into consideration, and formulating a Stress Testing Guideline taking systemic risks into consideration,” he added.