He, however, optimistic about bringing back siphoned off money
Finance Minister AHM Mustafa Kamal on Thursday categorically expressed his inability to fix the ailing capital market, but sounded high about bringing back siphoned off money to the formal economy.
“We could not identify any problems affecting the capital market. It will be identified and fixed accordingly,” Kamal told a pre-budget discussion at the NEC conference room of the Planning Commission.
Expressing his frustration, he said if the government injected even Tk5 lakh core in the market right now, it would just vanish after a few days.
“Those who are making the market situation bad are doing the job intentionally,” he claimed, adding that the government would take stern actions against the perpetrators.
Responding to an observation at the meeting, the minister said the siphoned off money would be brought back to the formal economy even if it took 10 years.
“No worry, I assure you that all the money would come back into the formal economy after 10 years,” Mustafa Kamal said.
The minister was addressing a pre-budget discussion with representatives of leading NGOs, editors of print and electronic media and economic reporters.
Mustafa Kamal said the situation of the capital market was supposed to be better ahead of the budget as the government was set to offer some fiscal incentives to revive the stock market.
“However, the market keeps falling,” he lamented.
He said currently the market had two types of investors; one group is like lion, while the other is like goat calf.
“We cannot bring all the different groups under a common platform,” Kamal said.
“It is impossible to teach all investors across the country about the market,” he stated.
Urging the investors for investing the market with good literacy knowledge and for long term period, the finance minister assured them of no fear in the markets.
The capital market would improve keeping pace with the country’s economic growth, he hoped.
“We do not want to see vulnerability in the market repeatedly, nor do we want to listen to people’s bad words any further,” said Mustafa Kamal.
Bank interest rate to cut
Finance minister said the bank interest rate in loan would be cut for the sake of boosting the country’s private sector.
“The interest rate is so high in the country, which is totally irrational. No industry can be operated taking bank loans at high rates — 16-18%,” he said.
The interest rates would be market-based and competitive like those of other countries, he assured.
On defaulted loan issue, Mustafa Kamal said the banking sector was facing crisis because of the high interest rate and lack of management.
“I assure you that you will not see any more defaulted loan again. I will take all measures to contain the menace,” he said, adding that a special audit was being conducted to address the perennial issue.
Laundered money will come back within 10 years
Mustafa Kamal said many were complaining about money laundering from the local economy to foreign countries.
“The money cannot be retained forcefully,” he claimed, adding that money would go where it would be cared for.
“Don’t worry. I assure you that all the money would come back within 10 years, seeing our investment atmosphere,” he said, adding that not only the money, but the foreign direct investment (FDI) would also witness rapid rise.
“After 10 years we will have thousands of factories, and by one year there will be minimum one thousand special economic zones which are now under construction,” he said.
No cut in saving certificates’ interest rates
Finance minister said he would not reduce interest rate of saving certificates issued by the government to borrow money to meet fiscal deficit.
“Saving tools are not for all. It is for a section of people,” he said adding that they would not deprive the investors by cutting the interest rates.
“But currently many people are investing there who are not eligible, increasing the sales of the instruments,” he said.
The government would ensure the certificates only for eligible investors, he assured.