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High interest rate irks minister, FBCCI chief

‘No single-digit lending rate yet despite privileges given’


FE REPORT | December 06, 2019 00:00:00


Commerce Minister Tipu Munshi admiring ceramic pieces at 'Ceramic Expo-2019' at International Convention City, Bashundhara in the city on Thursday — PID

Both the commerce minister and the country's apex trade body chief reacted angrily on Thursday for not having any visible progress in bringing down the lending rate to a single digit level.

None of the private banks has yet reduced the lending rate to the single digit level despite getting various privileges from the government, the commerce minister observed.

Criticising the role of Finance Minister, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) president Fazle Fahim also said, "What has the minister done over the last 11 months after resuming his office in reducing the lending rate to a single digit level."

Their reactions came at the inaugural ceremony of the three-day international exposition titled 'Ceramic Expo Bangladesh, 2019' in the city on the day.

Speaking as the chief guest, Commerce Minister Tipu Munshi termed the existing lending rate much higher. "It is not possible to do business with formal credit at 12 to 13 per cent rate of interest," he added.

"We (the government) want employment, business growth…but achieving those could not be possible under such a higher lending-rate regime. Businesses, factories would close one after another and the number of loan defaulters would rise," he added.

Bangladesh is the exception in the globe where the spread between deposit and lending rates is the highest, he said with a tone of frustration in his voice.

Despite the instruction from the Prime Minister and Finance Minister, bankers who received various privileges from the state, did not bring down the lending rate to a single digit.

"If things like that keep continuing, doing business would be impossible in the country," he feared.

Echoing the minister, the FBCCI president said the finance minister finally admitted after 11 months of his charge that the businessmen could not do business with the costly bank credit.

"My question is what the minister has done in those days. Was he in hibernation?" he questioned.

The FBCCI president said that lack of cooperation and professional inefficiency of the NBR officials and at the finance ministry are visible.

The NBR and the finance ministry are creating barriers to trade and businesses in the country which is unexpected, he added.

He said the existing higher tax burden on the ceramic industries is causing impediments to the growth of the highly potential sector.

He also said imported raw materials have 30 per cent moisture and the ceramic makers have to pay duty on that.

Simultaneously, he said, the ceramic makers also require paying supplementary duty (SD), which is imposed for protecting the local industries.

"But here it is hampering local industries. That's why the NBR chairman was not present at the function, which is unfortunate," Mr. Fahim said.

The Prime Minister provided necessary support to the country's businessmen, but various departments of the government were creating obstacles to doing business in the country, he said.

Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) President Sirajul Islam Molla said the local industry saw 200 per cent product growth in last 10 years and the investment saw 20 per cent growth.

Besides, local products are currently being exported to about 50 countries and directly and indirectly about 0.5 million local people are engaged in the sector, he mentioned.

The BCMEA is hosting the 2nd edition of the international exposition titled "Ceramic Expo Bangladesh-2019" at the International Convention City Bashundhara (ICCB).

Around 120 participants and 150 ceramic brands from 20 countries, including Bangladesh are participating in the event. Besides, 300 international delegates and 500 buyer hosts are also expected to join the fair.

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