Businesses on Tuesday urged the government to cut bank interest rates to minimise the operational costs of companies.

The business people also demanded a direct voting system in the election of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) to ensure more transparency and accountability.

The country got very little investment last year due to the high bank interest rates, said Nazrul Islam Mazumder, president of Bangladesh Association of Banks.

“The bank borrowers only enhanced their old bank loans.”

Mazumder spoke at a programme to introduce the panel of Kazi Akramuddin Ahmed, leader of the panel, for the FBCCI polls for 2012-14 to be held on Saturday, at Ruposhi Bangla Hotel in the capital.

If Ahmed got elected, his first assignment will be to have discussions with the government on how to lower the bank interest rates to 12 percent from the existing 16 to 18 percent, he said.

He also asked Ahmed to work to lower the bank deposit rate to 10 percent for healthy competition in the banking sector.

At the function, Selima Ahmed, managing director of Nitol-Niloy Group, urged the government to reduce traffic congestion, harassment of police and prevent smuggling of different goods so that domestic manufacturers can be more competitive.

She also stressed the need for ensuring more business facilitation to women entrepreneurs.

“But you have to ensure transparency and accountability in the FBCCI and I want direct election in this apex trade body.”

A strong research cell should be set up for the trade body, said Jashimuddin, FBCCI vice-president.

He blamed last year's poor foreign investment in Bangladesh on weak infrastructure and lack of gas and electricity.

Laos saw a foreign direct investment (FDI) of a total of $18 billion last year when Indonesia received $24 billion, he said. But Bangladesh could hardly attract $5 billion FDI a year at a time, he said.

The bank interest rate could not be reduced for tighter monetary policy of the central bank, said AK Azad, FBCCI president.

Bangladesh Bank uncapped bank interest rate from 12.5 percent a few years ago as per the recommendations of the International Monetary Fund, said Azad.

The central bank uncapped the interest rate justifying that if the bank interest rate is not increased, the flow of money will increase in the local market, and there will have a big inflationary pressure on the economy, he said.

Later, Ahmed introduced his panel for 30 directorial posts (15 from chamber group and 15 from association group).

News: The Daily Star/Bangladesh/22-Nov-12