Staff Reporter :
High bank interest rates and low credit disbursement to the private sector have now emerged as major crises for the economy, experts said.
These two problems in the banking sector are further slowing the pace of investment. The economic slowdown that appeared at the beginning of the 2024-25 fiscal year due to political instability and structural weaknesses has not yet fully eased.
Economic analysts and private-sector entrepreneurs say that the crisis in the banking sector is directly disrupting the goals of monetary policy. In a situation of high interest rates, limited credit, and growing uncertainty, businesses have reduced the import of new machinery. Not only that-the overall economy is now limping. Signs of frustration are visible everywhere. Credit is not flowing to the private sector, and big industrial groups are losing interest in investment.
In such uncertainty, no one wants to invest. As interest rates rise, investment the unavailability of the case documents, SI Jinnat said. In the remand plea, Inspector Akhtar Morshed said Shaukat and several unnamed suspects, working with Enayet, tried to stir fear among the public and threaten the country’s security, unity and sovereignty.
He also claimed they held secret meetings with political leaders, high-ranking officials and businesspeople to topple the interim government.
The plea also said Shaukat, along with others, had been trying to destabilise Bangladesh’s political, economic and social situation on behalf of a “powerful foreign nation”. Police want to question him to find out which groups he “conspired with”.
According to the case statement, Enayet moved to the United States in 1988 and became a US citizen in 2004. He allegedly came to Bangladesh on Sept 6 as an agent of a foreign intelligence agency to help overthrow the interim government.
The case says that around 10:30am on Sept 13, he was seen “moving suspiciously” in a Toyota Prado SUV in the capital’s Minto Road. Police stopped him after becoming suspicious. When asked why he was there, he could not give an answer. Police then detained him and seized two iPhones from his possession.
An Anti-Terrorism case was then filed over the incident at Ramna Model Police Station. Kazi Md Mamunur Rashid, secretary general of the Raushon Ershad wing of the Jatiya Party, and several others have since been arrested in connection with the case.
appetite falls. This puts not only entrepreneurs but the entire economy under pressure.
World Bank’s former lead economist Dr. Zahid Hussain, economist and Labaid Group Deputy Managing Director Sakif Shamim, and Apex Group Managing Director and former President of MCCI Syed Nasim Manzur focused the issues recently while discussed with journalists.
Dr. Zahid Hussain said that credit contraction and rising interest rates increase pressure on the economy by reducing investment, lowering employment, and hurting overall economic growth-although such measures may partially help control inflation. These steps are often taken to tackle high inflation and foreign-exchange shortages, but they increase pressure on businesses and people, posing challenges for economic stability.
Sakif Shamim said that the economy is now navigating an uncertain period under the dual pressure of high interest rates and credit contraction. Declining private-sector credit flow and abnormal increases in bank interest rates are halting the pace of investment. This is affecting production, employment, and overall economic growth.
He noted that the latest GED report highlights similar concerns.
Sakif Shamim further said a government report shows that by September 2025, private-sector credit growth had fallen to 6.29pc, down from 6.35pc-the lowest in four years. This is well below Bangladesh Bank’s target of 7.2pc. This means that investment has entered a “dead zone”.
To revive the economy, he stressed the need to reduce interest spreads, strengthen default-loan management, and boost private-sector credit flow.
Nasim Manzur said that due to tight central-bank policies and continued interest-rate hikes aimed at controlling inflation, businesses are under severe stress. The current interest rate has made business operations “almost impossible,” he said. “Entrepreneurs cannot bear this interest rate… for us, it’s becoming impossible.”
He said Bangladesh’s cost of capital is far higher than that of competitor countries like Vietnam and India, making production and export competitiveness extremely difficult.
Experts said, the recent data suggest that although some macroeconomic indicators show signs of recovery, challenges remain clear in investment, industrial production, and employment. The latest report published by the General Economics Division (GED) of the Planning Commission also highlights these concerns.
However, growth could rebound if low-interest loans can be ensured for agriculture, SMEs, and healthcare sectors. Running a business with bank interest rates of 15pc or more is extremely difficult and almost impossible. Because such high interest increases production costs and operational expenses, making it difficult to remain profitable in a competitive market, especially for small and medium entrepreneurs.
