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Finance Minister Amir Khosru Mahmud Chowdhury has said Bangladesh is exploring alternative financing mechanisms and dedicated investment funds to support economic growth as the banking sector faces a severe capital shortage.
He attributed the crisis largely to the massive outflow of laundered money, saying the shortage has made immediate recapitalisation of the banking sector essential.
“There is a serious deficit in the banking sector as a huge amount of money has been laundered out of the country. Depositors are struggling to get their money back, making immediate capitalisation essential,” Khosru said.
He was speaking as the chief guest at a luncheon discussion titled “Building Investor Confidence: From Policy Reforms to Effective Implementation”, organised by the American Chamber of Commerce in Bangladesh (AmCham) at a city hotel on Sunday.
The minister said traditional bank financing alone would no longer be sufficient to meet Bangladesh’s investment needs under the current circumstances.
He said the government was developing alternative financial channels and had received positive responses from foreign governments and international organisations to establish dedicated investment funds.
Khosru also acknowledged structural obstacles facing businesses and trade, describing Bangladesh as an “over-regulated” country where existing regulations and regulatory mechanisms often fail to function effectively.
He outlined several reform initiatives being undertaken by the government, including the restructuring of the National Board of Revenue (NBR) to separate tax policy formulation from tax administration and enforcement.
The reforms, he said, are aimed at improving the business environment, strengthening investor confidence and creating more effective channels for financing economic growth.