Bangladesh Bank (BB) Governor Dr Atiur Rahman has said the "good corporate houses" would get loan at lower interest rate while the "bad ones" would receive credit at higher rates from the commercial banks.
"Good corporate houses are getting bank loan at 11 per cent rate of interest. The bad companies should not get credit at lower rate. Rather I will be happy if the commercial banks do not offer any loan." the Governor said replying to questions by businessmen at a meeting in Dhaka on Wednesday.
Dr Rahman was answering the businessmen to their appeal on cutting the lending rate at a luncheon meeting on "Macro-economy and Investment: Bangladesh Perspective", organised by the American Chamber of Commerce in Bangladesh (AmCham) at a city hotel Wednesday.
AmCham President Aftab Ul Islam and the businessmen at the meeting urged the central bank governor to cut the bank rate in Bangladesh.
Dr Rahman suggested the businessmen to go for borrowing from the foreign lenders.
"Go to the foreign banks, go to the FMOs, go to the IFC (International Finance Corporation), go to the GTZ. They will give you money at less than five per cent rate. Why you will depend only on the local banks," he added.
"Go to the Board of Investment. I have attached two central bank officials there. They will suggest you how to borrow from the foreign banks," he added.
If you receive foreign loan at below 5.0 per cent rate the local banks would be forced to reduce the interest rate, it will cool down the market, he added.
Replying to a question of money repatriation through a massive underground trade with India, the BB Governor said he did not think that there was a big amount of illegal cross-border trade between the two neighbouring South Asian nations as he had three observations.
"First, if you see the difference between the formal exchange rate of the US dollar and the rate at the kerb market over the last one year in Bangladesh there is only 1.50 per cent difference. If it is below 2.0 per cent, I am not concerned."
"Secondly, although Bangladesh's import payment is rising, our foreign exchange reserve is also going up," he said.
"And finally, we have world standard anti-money laundering act which could check flight of capital to the foreign countries," he said adding "all of these three observations demonstrate that there is very little illicit trade."
The BB Governor termed the Bangladesh's macro-economic scenario one of the best in the world and urged businessmen to invest in the country.
US Ambassador in Dhaka Dan W Mozena said he had seen lack of quality education in Bangladesh in his working period here. "If Bangladesh can ensure quality education for its population, the country will be a real Asian Tiger," he stated.
AmCham President Aftab Ul Islam urged the BB Governor to take initiatives for building up business confidence, cutting bank rate, and encouraging private sector investments.
He also strongly demanded reform of the "inefficient" Board of Investment (BoI) for attracting private sector business.
Bad cos shouldn\\\'t get loans at lower interest: BB Governor
FE Report | Published: May 29, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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