
Dr. A B Mirza Azizul Islam
Dr. A B Mirza Azizul Islam, Economist : Private banks in our country colluding with one another determine the interest rate. To reduce the interest rate, the profit target would also have to be reduced.
If they become dependent on the government, why are commercial banks being opened? Let every bank be run by the government. Business has dwindled in our country because there are too many banks, thus, pushing up interest rates. In Economics, this is called Scale Economy, but this is not present here in our own economy.
State-owned banks would take decisions based on their own business. It is not their job to support private banks. Our neighboring India has a far lesser number of banks.
The amount of outstanding loans here is greater. Even if the banks make savings, there is no competition between them; rather they collude together to fix the interest rates. What they should do is mobilize their deposits. Overall, there is no lack of liquidity in the banking sector. Private banks would take deposits from state-run banks at low interest rates because they possess excess liquidity.
This article was prepared based on an interview taken by Mehedi Hasan and translated by Abrar Hussain.