The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), country's apex trade body, on Monday welcomed the move to lower the lending rate to single digit by banks and called for strong monitoring to make it sustainable.
The FBCCI also termed the move timely.
The 9.0 per cent lending rate facility will encourage investors of an investment-hungry country, it said.
The FBCCI at press conference held at the Federation Bhaban demanded the formation of a high-powered task force to check further accumulation of NPLs (non-performing loans) that, it said, hinder growth of investment and economy as a whole.
It suggested formation of an independent banking commission immediately to ensure clarity and good governance in the banking system.
The premier umbrella organisation of tradespeople made the call and suggestions in its reaction to lending rate cut by banks.
FBCCI president Md Shafiul Islam Mohiuddin thanked the prime minister, finance ministry, central bank and other stakeholders for reducing the lending rate to single digit.
They had long been advocating for this, he said.
"But the BB and the finance ministry need to make sure the continuation or sustainability of the rate," he added.
Mr Mohiuddin gave examples of the lending rates in other competitive markets in the region.
In many markets, he said, industrial loans are available with rates from 4.3 per cent to 8.2 per cent.
The FBCCI chief expressed the hope the reduced rate would cut the cost of doing business here alongside improving the country's competiveness.
Bangladesh needs $66 billion investment to achieve SDGs (sustainable development goals) and major parts of the requirements will come from businesses, he said.
"So, they [business community] want a congenial investment climate. Land is dearer here. If capital too becomes costly, it'll be tough to reach the target," Mr Mohiuddin mentioned.
Terming the ever-increasing volume of NPLs a serious problem for the economy, he sought a holistic approach to beat the challenge by reinforcing the banks' credit risk management.
"The NPL volume stood at over Tk 880 billion as of March 2018. We propose a high-powered task force that will help identity the reasons for swelling of bad loans," he said.
Asked as to whether the taskforce will be for protecting the defaulters, Mr Mohiuddin said there are two types of loan defaulters -- wilful and unintentional. Some borrower become defaulters for multiple unfavourable business factors, he cited.
"The banks keep track records of all defaulters. The FBCCI wants punishment of the real criminals. We boycott the wilful defaulters for moral reasons," he said.
About ensuring good governance in the financial sector, the FBCCI chief said an independent baking commission can ensure transparency in the system.
Mr Mohiuddin expressed the hope that the finance minister would form such a commission as soon as he can.
Following business community's repeated calls for a single-digit lending rate, the government provided various fiscal and non-fiscal benefits to banks.
In its latest move, the government reduced corporate tax by 2.5 per cent on banks and other financial institutions in the just-started fiscal year 2018-19.
The banks were also offered some other benefits like cut in cash reserve requirement and the limit of advance deposit ratio (ADR).
Other senior leaders of the FBCCI were present at the press briefing.
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