Bond market key to long-term financing | The Daily Star
12:00 AM, March 15, 2019 / LAST MODIFIED: 12:06 AM, March 15, 2019

Bond market key to long-term financing

Finance minister says

The bond market will be developed to give the banking sector relief from ongoing liquidity shortages, Finance Minister AHM Mustafa Kamal said yesterday.

Banks are giving out long-term loans with short-term deposits, which is not viable for the industry, he said at Agrani Bank's annual conference at InterContinental Dhaka.

“The banking sector cannot run in the way it has been running,” said Kamal, adding that the economy would not develop if this traditional method continued. “We will have to put emphasis on developing the bond market to collect long-term financing,” he suggested.

Referring to business conglomerate Pran, the finance minister said they were doing well and would be the first business group to get involved in the bond market.

The banking sector is weakening as financial tools are not being used, he said, assuring of bringing more reforms to the financial market. “We will bring back glamour and reputation in the banking sector,” he said.

The minister said the tax net would have to be widened for the country's development. The same people are continuously paying tax but new people are not coming under the net, he said, adding that new segments would be brought under the tax net instead of the tax rate being raised.

Presenting Agrani's health report, Mohammad Shams-Ul Islam, the bank's managing director, said default loans had been reduced to 16.21 percent at last year's end from 19.37 percent the previous year.

The number of loss-making branches declined to 21 last year from 43 the previous year while loan and deposit growths were 24 percent and 17.64 percent respectively, said the executive.

Moreover, the import growth was 77.52 percent whereas export growth was only 17.31 percent mainly due to the import of liquefied natural gas, he said.

Zaid Bakht, Agrani's chairman, presided over the conference while Fazle Kabir, governor of Bangladesh Bank, was present as a special guest.

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