Country’s trade and investment sectors would get momentum after the upcoming general election, a top central banker has said, expecting that the new administration would help boost investors’ confidence.
Bangladesh Bank Deputy Governor Abu Farah Md. Nasser made the observation at the 11th meeting of the Financial Sector Development Working Committee (FSDWC) on Wednesday, amid the present trade and investment situation in Bangladesh.
Business Initiative Leading Development (BUILD) organised the virtual meeting.
Co-chairing the meeting with Dhaka Chamber of Commerce and Industry (DCCI) President Barrister Sameer Sattar on Wednesday, Mr Nasser said that now the central bank’s key focus is on taking proper, visible and fast actions to ensure good governance in the banking sector.
It would help address the monumental challenges of controlling inflation, volatility in the foreign exchange market and higher non-performing loans (NPLs), he added.
“We’ve adopted a single exchange rate policy despite it being fixed by the ABB and BAFEDA. However, we’re strictly monitoring the rate,” he said, adding that the BB is keeping close contact with the Reserve Bank of India to manage the exchange rate fluctuation.
“Our officials may visit India to learn how they are managing the single rate,” he said.
On the NPLs, the BB deputy governor also expected that the NPLs would come down after December next as the central bank has already passed a set of instructions to the state-owned commercial banks in this regard.
“We’re planning to form asset management companies from next year,” he told the meeting.
The DCCI President stressed the importance of managing and controlling the NPLs through the implementation of governance issues supposed to be practiced by the scheduled banks.
He also emphasised on the need for development of a quick recovery plan for default loans with the stakeholders concerned to revitalise the financial sector.
Mr Sattar expressed gratitude to the Bangladesh Bank for streamlining the loan approval process and minimising approval times to ensure easy access to financing.
President of the Chittagong Chamber of Commerce and Industry (CCCI) Omar Hazzaz said businesses need to promote good corporate governance in the financial sector to gain trust and confidence.
In her presentation, BUILD CEO Ferdaus Ara Begum highlighted a comparative scenario between the Export Development Fund (EDF) and Export Facilitation Pre-Financing Facility (EFPF), and the constraints faced by the exporters in case of enjoying the EFPF, among other issues.
The policy paper recommended increasing the EFPF ceiling up to Tk 300 billion (USD 2.75 billion) based on the present demand of sectors concerned and proper monitoring of BB that would suggest providing loans to make back-to-back LC payments.
The EFPF ceiling for the RMG sector could be increased to at least Tk 3.0 billion from Tk 2.0 billion and for the leather sector from existing Tk 70 million to an amount equal to that of the RMG sector,” she said.
It also recommended online-based application services for the EFPF for proper disbursement, making availability of this fund for partial exporters, safeguard measures for exchange rate fluctuation and alignment for using bonded facilities.
Dr Mahmood Osman Imam, a finance professor at the University of Dhaka, mentioned that it is high time for the government to filter some development projects for some time and restrict imports of luxurious items for at least two years to contain inflationary pressure.
About the EFPF, he mentioned that the government had been advised to depend on the foreign exchange reserves when it was US$ 48 billion and now it should look for other sources as other countries are already doing it successfully.
ICAB Vice President Md. Yasin Miah said that the country needs to ensure good governance and accountability in the financial sector to attract deposits and investments, and conduct business globally.
The working committee members, representatives from the central bank, ABB, BKMEA, LFMEAB, scheduled banks, and trade bodies, academics, and entrepreneurs attended the meeting.
News Sources : thefinancialexpress
