Salman for strong bond market to boost private sector investment

Business Report
Private Industry and Investment Adviser to the Prime Minister, Salman F Rahman said a strong bond market is the need of the hour to boost private sector investment in the economy. He said although the economy is doing well in all socio-economic indicators, investment is not coming in the private sector at the desired level due to lack of long-term financing.
A vibrant bond market can help a lot, he said. “The country’s business environment is very good. But, there are some problems. Private sector investment is one of those. We are mostly dependent on commercial banks for any financing but banks are not supposed to go for long-term financing. Actually, banks receive short-term deposits. If they invest in long term financing, it will create a mismatch,” he said speaking at a function on Tuesday last.
He said, previously, some initiatives were taken for solving the problem of long-term financing but it was not effective. “For this, we need to have a strong bond market in the stock market to facilitate long-term financing for the industries,” he added.
Earlier, he said, the government formed Bangladesh Development Bank Limited (BDBL) comprising the Bangladesh ShilpaRinSangstha and Shilpa Bank. “But, BDBL was not empowered enough to meet the demand of long term financing,” he added.
Salman said the government is taking different initiatives to strengthen the country’s bond market and the other sourness of long term financing.
Responding to a question, he said, special benches will be formed in the High Court to quickly settle the writ petitions related to the defaulted loan. “The existing legal framework for the loan defaulters is enough for taking action against them. Our ArthaRinAdalat is strong enough. We have already discussed with the law minister and the chief justice to open special benches and give a time frame to settle the loan default cases,” he added.
The central bank on Thursday issued a circular asking the banks to provide minimum 10 per cent rebate on the total amount of interest or profit of the good borrowers for the last 12 months in every September.
In another circular, BB offered a special facility to loan defaulters allowing them to reschedule loans by paying 2.0 per cent down payment for a maximum period of 10 years. Welcoming the BB’s initiatives, Salman said, initiatives will help reduce new defaulted loan.
The government has taken the decision for unintentional loan defaulters which will help accelerate the country’s trade and investment, he said.

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