AK Azad, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) yesterday urged the government for lowering bank lending rate to the previous level of maximum 13 percent, in order to bring stability in the investment sector.

“Bank interest rate shot up to 18 percent after withdrawal of the lending cap, which was 13 percent earlier. The situation has worsened, and trade and investment has been stagnated,” he said while addressing a press conference at the Federation Bhaban in the city.

Azad observed that both domestic and foreign investments are discouraged due to high bank interest rate and liquidity crisis with the banks.

“I think the difference between deposit rate and lending rate should not cross more than three per cent,” the chamber leader said.

He suggested the central bank for considering other currencies other than US dollar in foreign transactions as the dollar price has shot up.

Azad also urged the Securities and Exchange Commission (SEC) for taking initiatives in bringing back big investors in the stock market. “To restore stability, the authority should bring back the big investors who earned huge profit during the recent past,” he added.

The president of apex trade body said the government should fix a time limit for the big investors including banks to reinvest in the stock market.

“Some 27 banks and 14 financial institutions raked in profits worth Tk 60 billion from the stock market. They’ll have to reinvest. The stock market will not be stabilised if the big investors stay away,” he said.

Azad urged Finance Minister AMA Muhith to sit with all stakeholders and the stock market regulatory body - SEC - for urgent decision and effective steps in this regard.

He stressed on the need for urgent restructuring of the SEC with necessary reforms in laws, apart from appointing the two members of the commission.

FBCCI First Vice-President M Jashim Uddin, Vice-President Mostafa Azad Chowdhury Babu and directors were present.

Source: Daily Sun/Bangladesh/May 30, 2011