‘Govt to bring down interest rate to single digit’

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DHAKA, Jan 14, 2020 (BSS) – Bangladesh Bank Governor Fazle Kabir today
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.

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