PM: Banks must lower interest to single digit

Prime Minister Sheikh Hasina today asserted that banks must bring down interest rates to a single digit because bank directors have been given various facilities.

Briefing media at a post budget conference at Bangabandhu Conference Centre in Dhaka on Friday, Sheikh Hasina said: “We always tried to bring down interest rates to a single digit and to do so, we had provided many facilities to private bank owners. But some banks did not do it.

“Interest rates will have to be brought down to a single digit by any means to boost investment. People cannot do business due to compound interest. We have mentioned the interest rate issue in the proposed budget, and a strict stance will be taken in this regard.”

The prime minister added that reform measures were included in the proposed budget for the banking sector, and further amendments will be brought to the Bank Company Act, 1991.

Last year, the government amended the act, increasing directors’ tenure from six years to nine years. The number of directors from a single family on a board was also increased from two to four.

The government had also cut CRR (Cash Reserve Requirement) by one percentage point to 5.5 percent with the aim to tackle cash crisis in banks.

Despite providing such facilities, some private bank directors did not keep their promise of bringing down the interest rate.  Presently, banks charge more than 10 percent on loans.

Discussing the recent loan rescheduling facilities given to defaulters, Sheikh Hasina said they will be given a chance to get rid of their defaulter status. 

“At the same time, the government will take a look at the loan status of all media house owners to find out how much loan they took and whether they are paying it back or not,” she warned.

Responding to a question about the weak health of the state-owned banks, the prime minister said: “Nothing to worry about the state banks. The government is well informed about their health and is continuously monitoring them.”

In the media briefing, Sheikh Hasina termed the proposed budget as public welfare-oriented, saying it is implementable.

Commenting on the black money issue, the prime minister said: “There is a risk of the money being laundered abroad. The government allowed the chance for whitening black money by introducing a 10 percent punishment charge to help prevent laundering.”

She also assured that her government will do something for the people who are making money legally.

Mentioning the recent loss in the Boro harvest, Sheikh Hasina said that farmers had spent less on harvest, as the government bore most of the production cost through providing various incentives.

“Rice production is high because the government is providing all kinds of facilities to the farmers. In the new budget, incentive was given for purchasing harvesting machineries,” she said.

Commenting on the employment generation target of 3 crore by 2030, Sheikh Hasina assured that it is possible because the government will not create jobs but will enable the youths to become self-employed.

“Employment does not necessarily mean more job creation,” she said at the briefing, adding: “The government has allocated Tk 100 crore in the budget for the youth, which will be used to train them, so that they can earn a living.”

Posing a question, the prime minister said that if unemployment went higher then why farmers had difficulty getting labourers during the harvest season?

“There is a shortage of labourers because employment rate went up,” she said.

The prime minister also termed critics of the proposed budget as psychologically sick.

“There are people who like nothing. They do not like when there is democracy in the country, and the economy is going well. They always look for flaws in everything. There is nothing to care about them because the people are happy about the budget and the benefit will reach even those living in remote areas,” said Sheikh Hasina.