Economic Reporter :
A seven-member committee, likely to be headed by a deputy governor of the Bangladesh Bank, would be formed shortly to reduce the bank interest rates and the Non-Performing Loans (NPLs), said Finance Minister AHM Mustafa Kamal on Sunday.
“The Bangladesh Bank Governor will form a committee including members from the Bangladesh Bank, public and private sectors and they will sort out a way (for implementing government’s plan for reducing NPLs and interest rates),” he said while talking to reporters after holding a meeting with the chairmen and managing directors of the scheduled banks at the NEC Conference Room in the city’s Sher-e-Bangla Nagar area.
The Finance Minister said the committee would submit its report within seven days while the final decision about the implementation of the government’s plan to reduce NPL and interest rates is expected in the 2nd week of this December and then a gazette or circular would be issued in this regard to implement it likely from 1st of January.
About the alleged ‘rising trend’ of NPLs, Kamal said the government could not play a strong role in the area which is NPL and the main reason behind this is the high interest rate.
“No other country in the world except Bangladesh has such high interest rates. But, we want to make competitive the manufacturing industry. If we want to create a competitive environment for this sector, we’ll have to enhance our locally logistical support as well as to reduce the interest rate,” he said.
Noting that the trend of NPL would automatically reduce in the country with the enhancement of competitive environment, he said all stakeholders who were present in the meeting strongly felt that the interest rate should have to be brought down to single digit.
“If the NPL reduces, the competitive advantage will increase while the foreigners will feel comfortable to do their business here,” he said adding that the private sector banks play an important role since they handle around 60 percent of the LCs in the manufacturing sector.
The Finance Minister said the government believes that the NPL would not increase when the decision would be implemented as well as the interest rate would come down.
He said it often becomes difficult for the businesses and entrepreneurs to give 14 to 15 percent interest rate and with the new decision, the loan defaulters would be able to repay their loans with an interest rate of 9 percent and it would not be on compounding rate.
He hoped that the NPLs would be cleared off or square off from the balance sheets of the banks within the next 10 years.
A seven-member committee, likely to be headed by a deputy governor of the Bangladesh Bank, would be formed shortly to reduce the bank interest rates and the Non-Performing Loans (NPLs), said Finance Minister AHM Mustafa Kamal on Sunday.
“The Bangladesh Bank Governor will form a committee including members from the Bangladesh Bank, public and private sectors and they will sort out a way (for implementing government’s plan for reducing NPLs and interest rates),” he said while talking to reporters after holding a meeting with the chairmen and managing directors of the scheduled banks at the NEC Conference Room in the city’s Sher-e-Bangla Nagar area.
The Finance Minister said the committee would submit its report within seven days while the final decision about the implementation of the government’s plan to reduce NPL and interest rates is expected in the 2nd week of this December and then a gazette or circular would be issued in this regard to implement it likely from 1st of January.
About the alleged ‘rising trend’ of NPLs, Kamal said the government could not play a strong role in the area which is NPL and the main reason behind this is the high interest rate.
“No other country in the world except Bangladesh has such high interest rates. But, we want to make competitive the manufacturing industry. If we want to create a competitive environment for this sector, we’ll have to enhance our locally logistical support as well as to reduce the interest rate,” he said.
Noting that the trend of NPL would automatically reduce in the country with the enhancement of competitive environment, he said all stakeholders who were present in the meeting strongly felt that the interest rate should have to be brought down to single digit.
“If the NPL reduces, the competitive advantage will increase while the foreigners will feel comfortable to do their business here,” he said adding that the private sector banks play an important role since they handle around 60 percent of the LCs in the manufacturing sector.
The Finance Minister said the government believes that the NPL would not increase when the decision would be implemented as well as the interest rate would come down.
He said it often becomes difficult for the businesses and entrepreneurs to give 14 to 15 percent interest rate and with the new decision, the loan defaulters would be able to repay their loans with an interest rate of 9 percent and it would not be on compounding rate.
He hoped that the NPLs would be cleared off or square off from the balance sheets of the banks within the next 10 years.
