Bangladesh Bank governor Fazle Kabir has said remittance inflow through proper banking channel has increased as the central bank has taken initiatives to discourage it through non-banking channels.
The central bank chief made the remark when the Board of Directors of Dhaka Chamber of Commerce and Industry (DCCI) led by its President Abul Kasem Khan met him at his office on Thursday.
He echoed the proposal of the DCCI President and said that for long-term financing for large mega infrastructure projects, they should have bond system in capital market as the banks are not financing for long tenure.
The governor said they need to create profitable large projects and if that could be done then financing will not be a problem.
He informed that the existing liquidity crisis is a very temporary matter and very soon there will be no liquidity crisis in the money market. He requested the businessmen of Bangladesh to invest their money in Bangladesh to create more jobs.
Fazle Kabir said there are many incentives for non-resident Bangladeshis if they invest in Bangladesh.
To develop the rural economy, the governor said, the Bangladesh Bank has given directives to commercial banks to increase their lending, especially the SMEs of rural areas of Bangladesh.
Change Management Adviser of Bangladesh Bank Allah Malik Kazemi, Banking Reform Adviser of Bangladesh Bank SK Sur Chowdhury, Chief Economist of Bangladesh Bank Dr Faisal Ahmed were also present.
DCCI President Abul Kasem Khan said cooperation and coordination among the Bangladesh Bank, Bangladesh Securities & Exchange Commission, Dhaka Stock Exchange, Chittagong Stock Exchange and Insurance Development Authority are needed to develop capital market.
Private sector credit growth aimed at being 16.8 percent in the current monetary policy compared to 16.3 percent in the last monetary policy.
The cost of credit must be maintained at single digit to achieve this target, said the DCCI President.
He also proposed to give special focus on SME and provide collateral free single digit interest loans to SMEs for empowering SMEs businesses improving access to market and finance.
The DCCI chief proposed to develop a National Infrastructure Development Monitoring Advisory Authority (NIDMAA) Bond/Fund for arranging financing in infrastructure development from local and foreign sources.
He said the overall non-performing loan (NPL) is at an alarming state and stood at Tk 80,307 crore in September 2017.
Kasem Khan said all commercial banks should take proper measures to recover their defaulted loans as soon as possible.
From January 2003 to March 2017, banks’ wrote off loans is worth Tk. 44,412.03 crore.
He also proposed to make Alternative Dispute Resolution (ADR) mandatory to reduce the huge backlog of cases of financial sector.
To increase the FDI inflow in growing and thrust industries, relevant regulatory and process reforms are to be addressed which are under the purview of Bangladesh Bank, Kasem Khan said.
He said to raise investment to GDP ratio by only 1 percent, which means injecting of money close to Tk. 20,000 crore into the economy and this extra money can be collected through capital market, bond market and through various funds.
DCCI Senior Vice President Kamrul Islam, FCA, Vice President Riyadh Hossain, Directors Engr. Akber Hakim, Hossain A Sikder, Humayun Rashid, KMN Monjurul Hoque, Nuher L. Khan, Salim Akhter Khan, Waqar Ahmad Chowdhury and Secretary General AHM rezaul Kabir were present, said a press release.