Banking sector and capital market need govt policy support
Abu Sazzad: Experts have underscored the need for restoring confidence of the investor on country’s banking sector and capital market in order to ensuring real graduation to mid income status as well as boosting economy of the country.
Vibrant banking sector and capital market are must for ensuring the targeted GDP growth rate of 7.8 percent or beyond for the current fiscal with a view to attaining real graduation to mid income status, said the economists.
For the adverse impact of the debatable 11th parliamentary election, they are concerned to attain the targeted GDP growth or surplus, they lamented.
Bangladesh must gear up itself to achieving growth above 8 percent or at least 8 over the next one decade for becoming developed country, they opined.
On the other hand, civil society members opined, recently, country witnessed a one-sided national election, and for this, such situation is a matter of concern to ensure business-friendly environment in the country.
Malfunctioning of democracy would impede good governance which could bring more corruption in public sector; they said adding proper application of democratic practice only can ensure real growth of Bangladesh.
According to Global Economists Forum (GEF), Bangladesh needs over than 8 percent GDP growth until 2030 to become mid-level status country along with political stability and favour of nature.
According to the economists, there are many challenges including policy support, providing a consistent socio-political framework and maintaining relentless institutional transformation, demographic advantage into GPD growth and sustainable diversification of products and export expansion with financial stability and achieve steady growth, increasing overseas employment and inward remittance inflow and making a high skilled workforce.
Policy and strategy formulation should be predicted on the fact that Bangladesh has the possibility of going beyond upper middle income level by 2030 and develop status country by 2050.
Talking to the Daily Industry, Dr. Atiur Rahman, former governor of Bangladesh Bank told the unfinished task in the financial sector management, including reform of commercial banks, restoring confidence in the capital market, bringing down cost of fund and reducing interest spread, promoting financial sector integration, moving towards capital account convertibility, reforming the foreign exchange mobility, strengthening banking supervision and cementing financial stability with financial inclusion for sustainable growth.
The central bank will have to continuously monitor fiscal stimulus activities combined with credit expansion and monetary discipline can sustain high rate of non-inflationary economic growth over the longer term, Rahman added.
Apart from the banking sector, Bangladesh has to ensure a well-managed capital market which will induce supply and demand for diversified capital instruments, promote financial intermediation between savers and stability, Rahman pointed out.
Dr. A B Mirza Azizul Islam, former advisor to the Caretaker Government underscored the need for establishing a strong capital market by eliminating inadequacies and anomalies so that private savers are encouraged to enhance their participation in the market.
Coordinated role of Bangladesh Bank (BB) and the Bangladesh Securities Exchange Commission (BSEC) as regulators would create a secure environment and avoid confusion and contradictory stances, Islam suggested.
“Investor’s education should therefore get high priority along with strengthening monitoring and surveillance. Improvement of corporate accounts is needed for transparency. Both the investors and national interest will be preserved accordingly by strengthening of BSEC”, Azizul Islam said.