Wednesday , 18 July 2018

Those dependant on savings might be affected

Mir Nasir Hossain, Former President, FBCCI: If interest rates on bank loans are utilized at 9%, business expenses will fall and non-perfuming loan portfolios would probably as well. But we need the help of the government to implement it, because there are two types of banks at work here – state-run banks and private banks. If their deposits are kept separate, state-run banks have less accountability; because they do not have share holders, EGMs are not compulsory for them and neither do they have to provide dividends. Everyone has to be brought under the same standard.
The decision to reduce interest rates to 6% could bring more investors to the stock market. If interest is low, people might be eager to migrate elsewhere. This in turn could positively impact the stock market, even though the current state of the stock market is not favorable. Nonetheless, people might try to find alternatives. Thus, it is imperative that the stock market is repaired as soon as possible.
The only problem is that those who are dependent on certificates might be affected to a certain extent. But those who are in Business or Corporate will be able to adjust easily. In an economy, every decision has both positive and negative effects, but we have to assess which decisions will benefit us comprehensively.
Whether single-digit interest rates would positively affect investment is dependent on a number of factors. Nevertheless, interest rates are still an important element to consider. If interest rates are single digit, it would certainly affect investment positively.
Based on an interview by Ashiq Rahman, translated by Abrar Hussain

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