CC Bangladesh President Mahbubur Rahman speaks at a workshop on ICC Rules and Tools for International Trade, in the capital yesterday.

Banks and businesses in the country need to take stringent measures to ensure that their sales transactions are watertight considering the on-going global economic crisis, said ICC Bangladesh President Mahbubur Rahman yesterday.

He said the global financial crisis will also increase economic uncertainty in Bangladesh, making it difficult for the country to achieve its target annual growth rate of 7 percent, according to World Bank.

The huge borrowing by the government during the first five months of current fiscal year as well as the ongoing volatile situation in the stockmarket will discourage banks to extend credit to the private sector, said Rahman.

He made the comment following ICC Global Trade Finance survey of International Chamber of Commerce (ICC) that gleaned hard facts from more than 100 countries.

The survey reported that 34 percent of the respondents indicated an increase in the percentage of documents refused on first presentation and 94 percent of the respondents experienced increased pressure from applicants to refuse documents during 2010, Rahman said.

He spoke while inaugurating a daylong workshop on ICC Rules and Tools for International Trade in the capital. ICCB organised the event with support from Eastern Bank.

In a report released on November 29, the World Bank said that economic growth in Bangladesh was strong in the fiscal year that ended this June, reaching 6.7 percent. But the donor agency said the growth outlook for the July 2011-June 2012 fiscal year remains uncertain.

"We are already noticing the effect of debt problems in the United States and the Euro-zone on Bangladesh's balance of payments and pressure on the exchange rate. It also noted that the country's slow pace of reforms, inadequate energy supply and poor infrastructure may also affect domestic and foreign investment further dampening economic prospects," Rahman said.

According to World Bank, a high and volatile inflation rate driven by food prices remains a concern in Bangladesh. Inflation reached 12 percent in September, the highest recorded since 1999, said he said.

The decision of the central bank to allow more commercial banks in the private sector may also create additional problems into the liquidity situation as well as shortage of qualified, experienced and efficient officials may worsen the situation further, he observed.

Source: The Daily Star/ Bangladesh/ 6th Dec 2011