The Dhaka Chamber of Commerce and Industry (DCCI) suggested on Tuesday that the government can utilize the country's foreign exchange reserve for various infrastructure development works.
A delegation of DCCI board of directors, led by its president Abul Kasem Khan, gave the suggestion at a meeting with Bangladesh Bank (BB) Governor Fazle Kabir at the central bank.
The DCCI president said in line with the economic vision for 2030, the private investment and GDP ratio needs to be increased to 35 per cent.
On an average US$20-22 billion annual investment is needed for infrastructure investment, whereas the current investment volume is only around $6.32 billion or 2.87 per cent of GDP, he also said.
"Huge infrastructure investment deficit is hindering the accelerated growth potentials of Bangladesh."
Overall Non Performing Loan (NPL) is at alarming state, and stood at Tk 621.72 billion as on December 2016. In order to reduce interest burden on SMEs and good borrowers as well as to ensure a healthy financial system, the NPL needs to be well managed, Mr Khan opined.
Considering the country's export diversity and expansion, Export Development Fund (EDF) beneficiary network can be extended, he also suggested.
DCCI's other recommendations included creation of a low-cost industry investment fund and SDG implementation fund, changing BB's foreign exchange regulation, and opening up private investment opportunities for Bangladeshi businessmen in foreign countries.
The DCCI chief further said weighted average deposit rate of the scheduled banks dropped to 5.22 per cent in December 2016. But the lending rate for SMEs is around 12-14 per cent, whereas weighted average lending rate is around 9.93 per cent.
He proposed for reducing this interest rate gap.
Mr Khan also proposed 7.0 per cent interest rate at borrowers' end of the BB refinancing fund, created for development of the dairy sector.
The BB governor said the government borrowing is lower now, which is an opportunity for the private sector to get more access to finance.
He also said foreign remittance inflow is more than 16 per cent lower than the same period of the previous year, which is a matter of concern.
"Bangladesh Bank is working hard to encourage NRBs to send remittance through proper banking channel."
Mr Fazle Kabir stressed on encouraging young generations to come up with innovative entrepreneurship ideas, mostly in manufacturing sector, rather than trading.
He also underscored the importance of bringing all the banks under automation and trusted cyber security system.
BB is closely monitoring the banks' automation and cyber security measures on a regular basis, he further said.
BB deputy governor S K Sur Chowdhury said interest rate on lending is relatively low now, and it is even lower for the good borrowers, as the banks are giving special incentives to them.
Terming NPL a serious concern, he said, "We have to minimize NPL, which will help to slash lending rate further."
Trade associations like DCCI should facilitate entrepreneurship in the country's remote and rural areas, and they should get access to finance, he added.
DCCI senior vice president Kamrul Islam proposed BB to create a separate fund, only for the light-engineering sector, with access to single-digit easy loan facility.
The DCCI's other suggestions to BB included simplifying policy for SMEs, online e-payment system for e-commerce, and lower interest rate on private sector lending.