Finance Minister AMA Muhith on Sunday announced that the government will keep 50 percent of pubic deposits at private banks in an effort to tackle the ‘liquidity crisis’.
“The process will be initiated immediately,” the minister said while inaugurating the annual general meeting of state-owned Janata Bank at a city hotel. According to the current rules, 75 percent of government assets are currently kept at state-run banks. Managing directors and chairmen from various private banks have long urged the government to make larger deposits at their institutions. Muhith also said bankers are now agreed to bring down interest rates on banks’ deposit. “Given the banking rules, the conditions of the country’s banks are not healthy,” he said. “This situation has long been prevailing in the banking sector because we couldn’t create capital market for banks,” the minister said adding, “For long-term financing, we’ve permitted banks as well as established Investment Corporation of Bangladesh, but failed to make any remarkable progress in the market.”
“We’ve tried to create a bond market for long-term investment but entrepreneurs had no enough strength there. So, it couldn’t bring any change,” the minister said. Janata Bank Chairmen Luna Shamsuddoha presided over the meeting while Bangladesh Bank Governor Fazle Kabir and senior secretary of the finance ministry, among others, spoke at the meeting.
