Interest rate on default loan will be 9 pc: Kamal

DHAKA, Finance Minister AHM Mustafa Kamal today said the honest loan defaulters would now have to pay a 9 percent simple interest with 2 percent down payment to pay off their default loans within a period of 12 years.

Now the interest rate to pay off default loans would be 9 percent simple rate which we earlier said 7 percent. But, the down payment for repaying such default loans would be 2 percent which should be repaid in 12 years, he said.

The Finance Minister said this while addressing a Meet the Press programme at the NEC Conference Room in the city's Sher-e-Bangla Nagar area. Secretaries concerned were present.

About the dishonest loan defaulters, Kamal said that the government is conducting a special audit to detect them and once it is carried out, an asset management company would be formed and assigned to recover their loans.

We'll be supporting good business houses and we'll not extend our support to those who are dishonest we'll provide incentives to the honest businessmen, he added.

Noting that the overall economy of the country is doing well in all considerations, the Finance Minister said it is his firm belief that the GDP growth rate of the country would reach double digit by 2025 which is also the last year of the 8th Five Year Plan.

About the budget for the next fiscal year, he said that the budget would be a balanced one where tax rate would not be increased, rather the tax net would be further widened.

There is ample scope for widening the tax net and we'll boost the revenue collection through widening the tax net, he added.

Regarding VAT, he said that the VAT rates would be multiple like 5 percent, 7.5 percent and 10 percent while the National Board of Revenue (NBR) would be brought under massive reforms.

He hinted that around 70,000 manpower would be appointed over the next 18 months to deal with the Electronic Fiscal Device machines to supervise collection of VAT.

About the insurance sector, the Minister directed the Insurance Development Regulatory Authority (IDRA) Chairman to consider introducing insurance on 'loss of profit' side by side introducing crop insurance on pilot basis at the Haor, Char and hilly areas.

Besides, in case of the mega projects like Rooppur Nuclear Power Plant, Padma Bridge and Padma Bridge Rail Link, Kamal suggested introducing insurance, double insurance and if needed reinsurance to cover the risks of such magnitude of projects.

He also hinted that the authorized capital of the state run Sadharan Bima and Jiban Bima Corporation would be raised up to Taka 1,000 crore while the paid up capital to Taka 500 crore.

In case of the public and private banks, the Finance Minister said that their paid up capital is likely to be raised to Taka 1,000 crore.

Terming stock market as the 'mirror' of the country's economy, Kamal said that the capital market is now strong but still it fails to attract expected investment.

He said that the government has a role to play in this regard and it would support the market through its mechanism, monetary and fiscal policy.

The Finance Minister said that he would sit with the stakeholders of the capital market every month, adding that the stock market is now stable and it would be a suitable place for investment.

He said that demand for additional Taka 80,000 crore to Taka 90,000 crore is there for the next fiscal year and the NBR would have to realize the lion's share of that amount.

The Finance Minister also noted that the exchange rate remained more or less stable over the last five years and it shows the sign of country's strong monetary policy.

Source: Bangladesh Sangbad Sangstha (BSS)