Finance Minister AMA Muhith said Sunday commercial banks must cut their presence in the stock market gradually since investing in the capital market is not their core business.

"Banks are not supposed to be playing in the stock market and they have to concentrate on expanding business activities through banking", the minister said.

He was speaking as the chief guest at a book launching ceremony titled "Shombhaboner Orthoniti" authored by Mamun Rashid, a banker and economic analyst.

The minister expressed his confidence in market mechanism and supported the functioning of the share market without much intervention while commenting on Sunday's fall of stock market which lost 400 points.

"Don't get panicked by today's market fall, rather let the market go by its own way", the minister said, adding that the government is trying to manage the problem created out of mismanagement.

Muhith also shared his views on various issues, ranging from micro-finance regulation, demutualisation of stock market, reform of taxation, budget implementation and corruption in education and other sectors while commenting on different chapters of the book.

"We'll surely implement the demutualisation of our stock market despite protest from the stock exchange authority and we'll do it within our tenure", he said terming it a major goal of the incumbent government.

Besides, he noted that demutualisation will help achieve the goal of national stock exchange, an idea presented by Mamun Rashid in his book.

While commenting on micro finance regulation, the minister came up with his observation that Microcredit Regulatory Authority (MRA) was doing good job in controlling 'sick' competition among Microfinance Institutions (MFIs) by fixing the ceiling of interest rate.

"Institutionalisation of Grameen Bank was done for ensuring sustainability of this approach, but, unfortunately, borrowers are getting entangled in the 'quicksand of loan", Muhith said, criticising the MFIs.

Earlier, the minister unveiled the book along with other dignitaries, which is a collection of different articles, mostly published in different dailies in 2010. Adviser of former caretaker government Dr. Mirza Azizul Islam was present at the launching as the special guest and vice chancellor of North South University Prof Hafiz G A Siddiqi presided over the function.

Dr. Aziz noted that banks showed collusive behaviour in fixing interest rates charged for loan but got involved in 'ill' competition in collecting deposit.

He also emphasised relying on market forces, good governance in reducing corruption and increased fund flow to education sector while commenting on the book.

He, however, expressed disagreement with the idea of National Stock Market and sought the finance minister's attention to demutualisation of stock market within next three to five years.

Mamun Rashid defended his proposition of a national stock market with his experience of India where it played significant role in stabilising the market.

Anyaprokash published the book which contains articles on different topics including stock market, budget implementation, stock market, microfinance, the incidence of 1/11 and potential of Bangladesh in its economic resilience.

News: The Financialexpress/ Bangladesh/ Feb-07-2011