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A budget biased towards bank & bankers

Masih Malik Chowdhury | June 14, 2018 00:00:00


The Finance Minister has presented his 10th consecutive budget in the Jatio Sangsad on June 07. His prelude to the Budget Speech has been full of feelings and sentiments of his sincere efforts in offering the budget. Himself a language activist, freedom fighter, an erudite human being, the FM's capability needs no mention. He is respected widely for many qualities inherent in him.

The budget is a document that stokes phobia among the lower and middle class people. It quite often adds pains for the commoners at large. This year, however, the price spiral for Ramadhan has been absorbed by the people. And during these tough days of absorbing high prices, the direct impact of the budget has not been seriously felt yet. Not because its impact on prices is zero but the fact is that people have become somewhat attuned to the shock.

This time, contrary to people's expectations, the budget appears to have taken more care of the banking sector in terms of undue facilitations. Tax rate would be reduced for the sector when it is literally drowning in non-performing loans (NPL). This proposal is outrageous. As the country is heavily affected by NPL, this proposal must be withdrawn. The capital market has been gravely affected by the banking sector scam. Despite these scams, the budget has overtly favoured the NPL delinquents.

Huge amounts NPLs are blocked up. Thus the investment income to banks on this loan is negative. This is because cost of fund is absorbed in the good borrowers' loan. The amount lent to continuing borrowers are also burdened with high interest cost. Thereby the interest rates are not being cut down. The government has been advocating for long to reduce interest rate at single digit. But it must not be forgotten that rate of interest is a function of demand and supply of loans to borrow and lend vis-a-vis supply of funds on loan chains.

A genuine people's government would have penalised the defaulters and delinquent borrowers. But, it seems the government is favouring them with NPL. The 15 per cent NPL overall, 35 per cent in the state-owned banking sector and 10 per cent in private banking sector, has overshadowed many accomplishments of the government. Instead of forming the long-awaited Bank Reform Commission to deal with bad governance in banks and NPL issues, NPL delinquents have been nakedly favoured by reducing income tax rate. It was not anticipated at all. This has derogated the well versed budget speech, its spirit of justice and fairness.

The apex chamber, FBCCI has expressed its dismay over inordinate favour bestowed on the banks and the defaulters.

Masih Malik Chowdhury, a Chartered Accountant, is Founder Partner ,Masih Muhith Haque & Co, & Past President (2015) of ICAB. masih@masihmuhith.com


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COMPANY YCP HIGH LOW CLOSE %CHG
PARAMOUNT 17.0 18.7 16.7 18.7 10%
GLOBALINS 12.8 14.0 12.7 14.0 9.375%
MEGHNACEM 91.1 99.9 92.1 98.1 7.6839%
PROVATIINS 16.4 17.7 16.5 17.5 6.7073%
PURABIGEN 12.4 13.5 12.5 13.2 6.4516%
ASIAINS 16.7 17.7 17.0 17.6 5.3892%
KARNAPHULI 15.0 15.9 15.0 15.8 5.3333%
REPUBLIC 25.1 27.2 25.3 26.4 5.1793%
MIDASFIN 23.1 24.4 23.3 24.2 4.7619%
PRIMEINSUR 12.7 13.6 12.9 13.3 4.7244%
COMPANY YCP HIGH LOW CLOSE %CHG
GLOBALINS 14.0 14.0 12.7 12.7 10.2362%
PARAMOUNT 18.7 18.7 16.7 17.0 10%
GREENDELT 58.9 59.0 52.5 54.0 9.0741%
PURABIGEN 13.3 13.5 12.5 12.5 6.4%
PROVATIINS 17.4 17.7 16.5 16.5 5.4545%
MEGHNACEM 97.0 99.9 92.1 92.1 5.3203%
IFIC1STMF 4.2 4.2 4.0 4.0 5%
POPULAR1MF 4.2 4.2 4.0 4.0 5%
DAFODILCOM 34.9 35.1 33.3 33.3 4.8048%
FASFIN 13.5 13.6 12.8 12.9 4.6512%
COMPANY YCP HIGH LOW CLOSE %CHG
ALLTEX 14.0 14.4 12.6 12.6 -10%
AL-HAJTEX 98.2 105.3 88.4 88.4 -9.9796%
ISNLTD 31.5 28.4 28.4 28.4 -9.8413%
CAPMIBBLMF 11.5 11.6 10.4 10.4 -9.5652%
JUTESPINN 148.4 152.9 133.6 134.6 -9.2992%
KEYACOSMET 7.6 7.3 6.8 6.9 -9.2105%
KTL 29.7 30.2 26.8 27.0 -9.0909%
MLDYEING 39.6 40.3 35.8 36.2 -8.5859%
IBP 36.9 37.0 33.5 33.8 -8.4011%
GQBALLPEN 82.5 84.5 75.0 76.1 -7.7576%
COMPANY YCP HIGH LOW CLOSE %CHG
AL-HAJTEX 88.4 105.3 88.4 101.3 -12.7345%
ALLTEX 12.6 14.4 12.6 14.4 -12.5%
GQBALLPEN 75.0 84.5 75.0 84.4 -11.1374%
CAPMIBBLMF 10.4 11.6 10.4 11.6 -10.3448%
JUTESPINN 133.6 152.9 133.6 149.0 -10.3356%
KTL 27.0 30.2 26.8 29.9 -9.699%
MLDYEING 36.2 40.3 35.8 39.7 -8.8161%
IBP 33.9 37.0 33.5 37.0 -8.3784%
PRIMELIFE 53.8 59.7 53.8 58.0 -7.2414%
ARAMIT 431.1 463.0 429.0 463.0 -6.8898%