Suggestions of FBCCI are nothing new but even now won’t have the courage to talk about of smashing corruption trap

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has opposed the proposal for lifting the existing interest rate cap – 9% on lending and 6% on deposits – and called for increasing the banks’ efficiency to reduce inflation. If banks can reduce their cost of funds, there will be no need to raise interest rates on loans. And if the government increases subsidies on gas and ensures uninterrupted supply, industrial production will increase. Consequently, inflation will also decrease.
Currently, the interest rate on deposits is not limited to 6% as banks are offering 7-7.5% interest on deposits. However, the industry will suffer if the cap of 9% interest for lending is removed. Even if the interest rate on deposits increases, it is possible to give loans at 9% interest by increasing the banks’ efficiency. This will be possible only if the banks can reduce their expenditure by 2-3%. Calling for increasing gas supply to industries, the FBCCI said gas supply to households can be reduced by 5% and that can be supplied to industries. It is also possible to supply additional gas to the industry by cutting off illegal gas connections.
The FBCCI president said traders are willing to pay extra for gas. Moreover, increasing government subsidies a little can normalise gas supply. The government collects more as duties, taxes and VAT than the amount it subsidises for the energy sector. The FBCCI has proposed to the State Minister for Energy that tariffs can be slightly reduced to increase the supply of gas. Currently, most of the factories are located outside Dhaka, where the REB is responsible for supplying electricity. Providing 40% less power to the REB means severe power outages in the factories.
Due to the energy crisis, Germany is returning to coal-based power plants. We have coal reserves to meet the country’s demand for 50 years. The demand for energy needs to be met for industrialisation to generate investment and employment in the country.
 We think the suggestions proposed by the FBCCI should be considered for overcoming the feared recession and famine by steering up the business gear in the right direction.