Hasina threatens tough action over high-interest bank lending rates

Sheikh Hasina has threatened the private banks with tough actions if they do not lower the rates of interest they charge to lend to or below 9 percent.

Asked about the issue at a post-budget media conference in Dhaka in Friday, the prime minister said the national budget proposed on Thursday included instructions on single-digit interests on bank loans.   

“We will take stern action. They (banks) must comply with the rule on keeping lending rates at single-digit,” she said. 

“We always tried to limit the rates to single-digit and provided some facilities for this, but many private banks haven’t followed the instructions,” Hasina said.

She is hoping that domestic investment will rise once the lending rates are cut to single-digit. 

The prime minister also said the government may change laws with regard to complex interest rates because these were making it difficult to run business.

In March, she described the high interest rates on bank loans as “the biggest obstacle” to industrialisation in Bangladesh.

She accused some banks of not keeping their word that they would lower the interest rates if the government kept 50 percent of its funds in private banks.

BLACK MONEY AND LAUNDERING

About the government’s plan to prevent undisclosed income from being smuggled out of Bangladesh, Hasina said the Bangladesh Bank has a separate committee for this while the office of the attorney general and the Anti-Corruption Commission were also working to stop money laundering.

She also spoke about the planned windows to legalise the so-called black money.

“Black money means you have got money that remains after some crimes sometimes. Maybe someone gets some money for some reasons but they can’t use it and finally try to smuggle it abroad or use it in other ways

“To stop this, we are giving the opportunity to invest the money,” she said and added all the previous governments had given similar opportunities.

Finance Minister AHM Mustafa Kamal in his budget speech in parliament on Thursday proposed exemption of undisclosed income from government scrutiny if the funds are invested in economic zones and high-tech parks with 10 percent tax.

Different rates of taxes will also be charged for construction of buildings with dirty money in addition to purchase of any apartment once the proposal is passed.

A journalist asked the prime minister if the scopes of whitening black money will discourage honest people.

“Look, (some people) have made black money and we first need to bring it into the [system]. They may have stashed away the cash so carelessly that mice may much on it,” she quipped.

“And for those who earn honestly, there is no such fear. They will not face any problem by the grace of Allah,” the prime minister added.