The New Nation - Internet Edition

Shamim Jahangir

Noted businessmen and industrialist Deen Mohammad has suggested that the Bangladesh Bank should fix single-digit deposit and lending rates of interest by formulating a new rule for rapid industrialisation of the country.

Besides, the government should take necessary steps to increase generation of power to boost industrial productivity and economic growth.

In an interview with The New Nation yesterday, Deen Mohammad, who is also the Chairman of Phoenix Group, said that the industrial growth in the country was not taking place up to the expected level due to unusually higher lending rates charged by commercial banks.

Besides, the commercial banks have to pay high rates of interest to depositors, which are virtually affecting the industrial growth in the country.

Deen Mohammad, who was the former chairman of City Bank Ltd, suggested that the interest rate on deposits should be 7 to 8 per cent while the interest rate on lending should be limited to 9 per cent.

"Bangladesh Bank should formulate a law to bring down both deposit and lending rates to a signal digit. It will bring a radical change to the country's economy. In turn, we (industrialists) will be able to present a Golden Bangladesh."

If this step is taken, it will lead to industrial revolution and generate huge employment opportunities in different sectors of the economy, he observed.

The Phoenix Group chairman also expressed the hope that the government should ensure uninterrupted power supply for smooth functioning of the industrial units in the country.

Referring to the acute power shortages facing by the country's industrial units, Deen Mohammad that industrial productivity has gone down alarmingly due to unrelenting power crisis.

"The government should withdraw all the duties and remove complexities to import the machinery for setting up power plants in order to generate required electricity under the private sector. Besides, the government should take necessary steps to invite both local and foreign investors for setting up power plants," he said.

Deen Mohammad, who is a pioneer in the field of leasing financing business in Bangladesh, regretted that the existing laws were not in favour of the growth of leasing companies in the country. "We cannot open any letter of credit (L/C) and collect short-term deposits like the traditional commercial banks," he said.

In this regard, he called upon the government to withdraw an amendment to the Income Tax Ordinance 1984 which states 'No allowance under this paragraph shall be made for a leasing company on such machinery, plant, vehicles or furniture given to any lessee on financial lease.'

"The leasing companies may be compelled to stop their businesses due to huge financial losses incurred by this particular amendment to the Income Tax Ordinance 1984," he cautioned.

Besides, he urged the government to abolish the relevant clause of the Income Tax Ordinance, 1984, which makes it mandatory for all public limited companies registered under the Companies Act, 1994 to pay 20 per cent tax on dividend incomes.

Deen Mohammed was born in a religious Muslim family at Lalbagh in Old Dhaka in 1942. He has one son and two daughters who are also associated with business.

He started his business career with a capital Tk 50,000 in the then East Pakistan (now Bangladesh) in late 1960s. Later, he set up a steel mill with the financial support from his father Haji Noor Mohammad, also a noted businessman, with a capital of Tk 2 lakh at Tejgaon in Dhaka in 1964.

From the profits of the still mill, Deen Mohammad established The City Bank Ltd, the first private bank in the country with the support from his partners and friends. Later, he set up Phoenix Insurance Company Ltd, Phoenix Finance and Investment Ltd, Apollo Ispat Complex, Rupayan Group, Phoenix Medical Centre Ltd, Rangdhanu Spinning Mills Ltd, Sonargaon Dyeing and Printing Mills Ltd, Eastern Dying and Calendaring Works Ltd and Phoenix Home Textile Ltd.

In 2003, he set up Apollo Ispat Complex spending Tk 400 crore.

Deen Mohammad visited most of the countries across the world and gathered knowledge on how to establish leasing and banking companies in the country, and contribute to the progress and prosperity of the nation.

"I have applied my knowledge and experiences which I acquired from outside the country. It has been enriching my companies day by day," he said.

Asked about City Bank's performance which launched its activities as a first private bank in the country in 1983 and has around four lakh clients, Deen Mohammad, who is also a director of the City Bank, said, "We have launched technology based modern banking recently coming out of the traditional banking system."

He further said that the City Bank has established 'City Bank Foundation' to help distressed people.

Besides, it has been contributing to the beautification of Dhaka City as a part of its Corporate Social Responsibility.