Bangladesh Bank Governor Dr. Ahsan H. Mansur has said that the refund of customers’ money from the merged Sammilit Islami Bank may start within next week.

He said this at a presentation of a report titled ‘Bangladesh’s Progress in Achieving Sustainable Development Goals’ at the NEC Conference Room of the Ministry of Planning on Monday (December 8).

He said, the merger of five banks is underway. The deposit guarantee has been increased from one lakh to two lakh. The distribution of money may start from this week or next week.

Stating that Bangladesh has not moved towards making the dollar price market-based as advised by the International Monetary Fund until the foreign exchange market stabilizes, the Governor said, “If that had happened, the currency price could have risen rapidly like Sri Lanka or Pakistan. It might have reached 190 to 200 taka at present. We have not listened to them in all cases. Many have criticized this decision. However, today our currency exchange rate is under control.”

Stating that earlier, the emphasis was on paying off the three and a half billion dollars of foreign liabilities, he said, because the guarantee facility for opening LC for this liability was less. Currency market stability was necessary so that inflation was under control. When I took charge, the dollar rate was 120 taka; now it is around 122 taka. Reserves have also increased. Stating that discussions are going on inside and outside the government regarding reducing the interest rate, the Governor said, discussions are going on inside and outside the government. However, inflation has come down due to the increase in interest rates. Currently, no intervention is being done in the currency market. Deposit rates have increased, printing money for budget support has been stopped, and dollar sales have been stopped. If the NBR increases revenue, the government’s debt pressure will decrease and deposits will increase further.

Meanwhile, revenue collection has increased by 15 percent this year, yet the tax-GDP ratio is decreasing, which is a matter of concern, NBR Chairman Abdur Rahman Khan said, “It is necessary to examine whether there is a deficit in the GDP calculation anywhere. The VAT law has not been effectively implemented. From now on, the NBR will no longer provide tax exemptions itself, for this, approval will have to be obtained from the parliament.”

He said that despite a 20 percent growth in revenue in the first three months of this year, emphasis is being placed on identifying where VAT and other taxes are being lost, and there are also plans to increase revenue collection through digitization.

The NBR Chairman also said that to increase revenue, customs duties will be reduced, VAT and other taxes will be increased, and the use of cash will be reduced. This will make tax collection easier and remove the complexity of VAT rates. Two secretaries will be appointed in two departments of the NBR during the tenure of the current government.

Dr. Zahid Hossain, former chief economist of the World Bank in Bangladesh, said that the negative aspects still outweigh the positive aspects in the analysis of various indicators of the economy. However, the situation could have been worse. After August 5, irregularities have emerged in the macroeconomic system due to the vacuum in various institutions. Lessons have been learned from the reform experience of the last one and a half years, but major implementation has not yet taken place. Stamina and political will are required for reforms.

CPD Distinguished Fellow Dr. Mustafizur Rahman said, “Interest rates have been raised to control inflation, which has resulted in reduced investment and employment and increased income inequality. Institutional reforms and corruption control were necessary to ease business, which have not yet been done.”