Finance Minister AHM Mustafa Kamal has admitted of the weak condition of capital market and fragile state of the banking sector at parliament.
In reply to a supplementary question from Awami League MP Ahsanul Huq Tito, Minister Kamal said that the government plans to mend the capital market.
The finance minister in his speech said the reflection of the stronger economy of a country is seen in the capital market first.
“In the world, capital market and economy are related this way. Our country’s economy is vibrant and strong. World Bank and IMF have lauded our progress. They have asked other countries to follow Bangladesh,” the minister said.
“But in the share market, we have identified problems and solve them periodically,” he said, adding: “our advancement will be stopped if we cannot control the share market”.
He said that he already had meetings with the stakeholders of the market to such cause and will do that more in the coming days.
“We will try to run the market like it runs in other countries of the world. The loopholes of the market will surely be removed,” he said, adding, ‘He assured that the government will do whatever needed to run the capital market strongly.’
The minister said that as the capital market and economy is interwoven and integrated, for that there will be incentives for the market in the next budget.
“But how much will be that incentives I cannot tell that right now,” he added.
Responding to another treasury bench MP M Israfil Alam, Kamal said the country’s banking sector is now in delicate situation.
“Our banking sector is now in delicate position. There is no problem to accept that,” he said.
He also mentioned that this kind of incidents occurs in every country as it is not possible all time in a developing country to run all the sectors in a balanced way.
“In that situation I will not say that our banking sector is doing bad,” he said.
He said that the rate of interest in the country is higher. “In the whole world no country has the 14-15 percent interest rate,’ he said.
After considering everything the prime minister, for the sake of industrialisation and trade, proposed for the single digit interest rate, added the minister.
“We are doing one thing, soon we will formulate a rate integrating with the whole world. If we can implement that rate of interest it will be turning point for the history of the economic sector of Bangladesh,” he said.
The finance minister mentioned that if the interest rate cannot be lower down to single digit there will be the incidents of write offs repeatedly which will increase non-performing loans.
“The weak areas will be weaker, we don’t want that repetition. We have started our work, now it is the time for implement it, we will reduce the interest rate, we will keep the rate under single digit which was the pledge of the prime Minister,’ he added.
In reply to a supplementary question, Kamal said there are policies across the world to forgive the loan defaulters. He however said all loan defaulters cannot be forgiven.
“The country’s economy will not run if we send all businessmen to jail. However, we cannot grant forgiveness to all. We must take actions against those who become loan defaulters willingly. They government will take hard stance against them.
