Economy going through ‘painful’ investment period, says finance minister

Internal and global headwinds have put significant pressure on Bangladesh’s economy for the past few years, he says

Finance Minister Amir Khosru Mahmud Chowdhury has described Bangladesh’s current state of investment amid the internal and global economic headwinds of the past few years as “painful”.

Speaking at the inauguration ceremony of the Bangladesh Startup Investment Company (BSIC), established under the ownership of 39 commercial banks in the country, he said: "We are going through a painful time for investment. Everyone knows that major problems have arisen in the country's banking sector.

“We want to resolve the problems of the banking sector. These are all a part of the economy. We will solve them by working together. We have a political commitment to that."

The startup company was inaugurated at a hotel in Dhaka at 11am on Tuesday.

Stating that there will be no political interference in the banking sector, Amir Khosru said: "This government is working in collaboration with JP Morgan, the World Bank, and IFC (International Finance Corporation) to resolve the problems that have arisen in the banking sector and the economy.

“The banking sector has faced significant difficulties, which I do not want to elaborate on.”

The BNP leader, announcing that major reforms are coming to develop the country's stock market, said: "We are going to conduct capital market reforms. There will be major reforms. We are going for serious regulation in a big way."

The finance minister noted that BSIC’s mission to provide funds for entrepreneurs is consistent with the BNP's election manifesto. He said, "We have a programme called Creative Economy. In it, priority will be given to the rural economy to provide employment to 10 million people. I hope a lot of work can be done for the creative economy under this initiative."

Khosru said, "I promise that there will be no political interference in this investment. The transparency that we want to bring to the financial sector will be reflected through this."

Bangladesh Bank Governor Mostaqur Rahman said, "The next stage of development of Bangladesh's financial sector requires institutions that will ensure innovation, discipline, transparency and accountability. BSIC is an important initiative to channel domestic capital to productive and technology-based entrepreneurs.”

"The benefits of this investment should be received by marginalised people because if the marginalized people do not get these benefits, a large part of them will be deprived."

The governor expressed his regret that the Tk 5 billion startup fund formed earlier by the central bank was not successful, stating: "I believe that the startup fund will work this time as it was formed through a joint venture with the banks."

BSIC is launching with Tk 4.5 billion in funds, which it plans to increase to Tk 7 billion by the end of this year.

The Association of Bankers Bangladesh (ABB), an organisation of private bank executives, led the formation of BSIC in collaboration with Bangladesh Bank.

The board of directors of BSIC includes the managing directors of five banks, both public and private.

Mashrur Arefin, ABB chairman and managing director of the privately-owned City Bank, has also become the first chairman of BSIC.

The other four members of the board are Mutual Trust Bank (MTB) Managing Director Syed Mahbubur Rahman, Sonali Bank Managing Director Shawkat Ali Khan, Pubali Bank Managing Director Mohammad Ali and Eastern Bank (EBL) Managing Director Hasan O Rashid.

The 39 banks, which are shareholders, will increase their investment at the rate of 1 percent of their net profit every year.