Prime Minister Sheikh Hasina questions banks over high interests

Prime Minister Sheikh Hasina has lamented the failure of banks to lower loan interest rates despite numerous government efforts to facilitate such a move.

Speaking at the inauguration ceremony of the National Industrial Fair 2019 at the Bangabandhu International Convention Centre on Sunday, Hasina said, "I believe that the biggest obstacle to industrialisation in our country is bank loans. We are looking into the matter. We explored ways to reduce interest rates of bank loans a few days ago."

The prime minister also urged the borrowers to repay their loans and interests in a timely manner to keep banking institutions operational.

"It won't be difficult to reduce interest rates then."

Addressing the high interest rates, Hasina said, "We have tried to address this. We've taken a number of initiatives and spoke about these. We've also offered various facilities to banks. For instance, in the past, 70 percent of the finances of government institutions would be kept in government banks while 30 percent would be kept at private banks."

"Bank owners then said, 'if the allocation is made on a 50-50 basis then we will bring the interest rates down to a single digit.'"

"We were prepared to do that. A few banks did in fact bring the interest rate down to 9 percent. But the rest didn't follow suit. They went on to increase the rates to 14, 15, 16 percent.”

Hasina also warned bank owners that the government will look into their other endeavours, including the payment of taxes and VAT.

"Now the question is that the bank owners themselves own industries. They also engage run businesses. I may have to interfere in this area. They're running banks and industries but at the same time, refusing to reduce interest rates,” Hasina said.

“The government cannot take care of everything. We have completely liberalised the private sector. The private sector is recognised by our constitution."