The New Nation - Internet Edition

Staff Reporter

A delegation of the Bangladesh Association of Banks (BAB) led by its chairman Nazrul Islam Majumder met the Finance Adviser to apprise him of the increased investment demand in the country and help solve liquidity crisis faced by the banks.

The BAB leaders sought the Adviser's intervention to help channel more government funds to the private banks to meet the investment demand that would bode well for the overall economy.

They also requested the Finance Adviser to take necessary initiatives to increase the ratio of government funds in the private banks from existing 25 per cent to 50 per cent.

An investment-friendly budget and investment-friendly climate are increasing investors keenness demand in the country, Finance Adviser Dr Mirza Azizul Islam told newsmen yesterday.

"This may have raised the demand for bank loans," he said following a meeting with the leaders of Bangladesh Association of Banks (BAB) at the Planning Ministry.

Dr Aziz assured the private bank owners that he would consider the issue as well as few other demands for tax exemption, including reduction of corporate income tax.

Replying to a question, the Finance Adviser said the demands have not been reflected in the budget that indicated that the government was not convinced about their demands. Now they raised the demands in a changed perspective.

Replying to another question, Dr Aziz said the bankers have apprised him that the investment demand increased recently due to different initiatives by the government to create more congenial investment climate.

The initiatives include measures to build business confidence, including better business forum, investment-friendly budget, political stability and improvement in the port management.

The Finance Adviser, however, does not agree over liquidity crisis in the banking system saying that at present call money rates are not too high.

On the other hand, BAB Chairman Majumder said they were not getting adequate deposits, even at higher rate, to meet the increased investment demand. Even for six-month term deposits the banks are offering 13.5 percent interest, he said.