The central bank governor has been requested by business leaders to reduce bank interest rates to single digits, as they stated that borrowing costs are impacting businesses. During a meeting between a business delegation representing various leading sectors and Bangladesh Bank Governor Ahsan H Mansur at his office in Dhaka, the demand was raised.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the apex trade body, led the delegation.
As they get ready to meet the challenges of Bangladesh’s departure from the group of least developed countries (LDCs) in November of next year, the business executives also stated that they require better banking facilities and enhanced services.
They went on to say that in order to overcome present obstacles and get ready for the post-LDC era, the impacted business units require assistance from government policies.
Once Bangladesh graduates to a developing country, it will no longer have privileged market access and local companies may become less competitive in the global supply chain, they warned.
Businesses are trying to increase efficiency by lowering the cost of doing business and facilitating commerce in order to stay competitive after graduation, they noted.
The leaders stated that they have been deeply affected by the Covid-19 pandemic, the Russia-Ukraine war and last year’s mass revolution in July-August which caused major disruptions in businesses.
Additionally, since many small businesses lack the financial capacity to purchase bond licenses, they called for SMEs to be permitted to open consecutive letters of credit even if they do not currently hold one.
They also said that business operations are being hampered by the high bank interest rate.
Businesses demand an extend of the duration of the central bank’s loan rescheduling facility in addition to reduced bank interest rates, according to Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association, who spoke after the meeting.
According to him, several businesses were unable to use the facilities in the allotted time.
Mohammad Hatem added that they had called for the Export Development Fund (EDF) to be expanded from its current US $ 3 billion to US $ 7 billion, as the previous administration had cut the amount. They also called for the establishment of a central bank contact point where companies may talk about their issues and the steps that the government and the central bank should take.
Since the previous Taka 5,000 crore fund’s lifespan ended in April of this year, the business leaders also demanded that the pre-shipment credit plan be relaunched.
The central bank notified them that a committee led by a Deputy Governor has been established to resolve a number of financial issues that firms experience, according to Mahmud Hasan Khan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Mahmud Hasan requested the governor to ensure the on-time completion of bank mergers so that less challenges are faced by businesses owing to this process.
