Excess liquidity in banks, a transitory trend: Mashiur
Monday, 23 November 2009
FE Report
Mashiur Rahman, adviser to the prime minister on economic affairs, Sunday said excess liquidity in the banks will not last much longer, as it is mainly because of the fall in investment.
"I think this a temporary phenomenon and will not last long," he added.
He said the country's central bank might examine the issue and explain it and added, "An increase in remittance flow is also contributing to the country's excess liquidity."
Mr Mashiur was addressing as chief guest a seminar styled "To Remove Policy and Institutional Barriers" for light engineering sector development.
Bangladesh Engineering Industry Owners Association (BEIOA) organised the seminar at a city hotel.
He said the central bank could employ its managerial skills to solve the excess liquidity situation.
Mashiur said providing preferential loan creates many troubles. He said, "If there any preferential loan is provided, a vicious circle will grow."
He also said the government imposed value added tax (VAT) in the budget to raise revenue 'but ironically the real picture is just the opposite.'
He, however, assured the light engineering sector of resolving the anomalies existing in the sector.
Mr Mashiur said vocational institutes could be established both by private and public sectors, as it will help country's industrialisation.
"I don't see any logic why vocational institutes are not being established by the private sector when they had opened a large number of private universities," he added.
He said vocational institutes could create employment and raise income.
Referring to an example of India, the economic adviser said during 60's there were a large number of unemployed engineers in India and the government provided funds to them to do business.
Addressing the meeting Standard Bank Chairman Kazi Akram Uddin Ahmed said his bank will extend full support to the development of the country's light engineering sector.
BEIOA president Abdur Razzaque in his keynote paper recommended formation of a core group consisting of stakeholders from concerned ministries, BSCIC, BITAC, BUET, SME Foundation, development partners, trade organisations with a time-bound term of reference under the supervision of prime minister.
Mashiur Rahman, adviser to the prime minister on economic affairs, Sunday said excess liquidity in the banks will not last much longer, as it is mainly because of the fall in investment.
"I think this a temporary phenomenon and will not last long," he added.
He said the country's central bank might examine the issue and explain it and added, "An increase in remittance flow is also contributing to the country's excess liquidity."
Mr Mashiur was addressing as chief guest a seminar styled "To Remove Policy and Institutional Barriers" for light engineering sector development.
Bangladesh Engineering Industry Owners Association (BEIOA) organised the seminar at a city hotel.
He said the central bank could employ its managerial skills to solve the excess liquidity situation.
Mashiur said providing preferential loan creates many troubles. He said, "If there any preferential loan is provided, a vicious circle will grow."
He also said the government imposed value added tax (VAT) in the budget to raise revenue 'but ironically the real picture is just the opposite.'
He, however, assured the light engineering sector of resolving the anomalies existing in the sector.
Mr Mashiur said vocational institutes could be established both by private and public sectors, as it will help country's industrialisation.
"I don't see any logic why vocational institutes are not being established by the private sector when they had opened a large number of private universities," he added.
He said vocational institutes could create employment and raise income.
Referring to an example of India, the economic adviser said during 60's there were a large number of unemployed engineers in India and the government provided funds to them to do business.
Addressing the meeting Standard Bank Chairman Kazi Akram Uddin Ahmed said his bank will extend full support to the development of the country's light engineering sector.
BEIOA president Abdur Razzaque in his keynote paper recommended formation of a core group consisting of stakeholders from concerned ministries, BSCIC, BITAC, BUET, SME Foundation, development partners, trade organisations with a time-bound term of reference under the supervision of prime minister.