Bangladesh

Govt serious about offloading shares of state banks: Kamal

The government has not discarded its plan to offload shares of several state-run banks, said Finance Minister AHM Mustafa Kamal.

"We are seriously thinking about it. We will offload some shares of Rupali Bank first. Then, the shares of other banks would be offloaded gradually," he told The Daily Star in an interview.

The decision to offload the shares of the state-run banks by September came at a meeting on February 9 as part of the government move to prop up the ailing bourses.

As per the plan, an additional 15.2 per cent shares of state-run Rupali Bank would be offloaded first under a secondary offering.

Rupali was listed with the stock exchanges in 1986, with 9.8 per cent of its shares now up for trade. A secondary offering is the sale of new or closely held shares by a company that has already made an initial public offering.

Bangladesh Development Bank is supposed to offload 25 per cent share and Janata and Agrani to offload 10 per cent to a maximum 25 per cent shares.

Kamal said some works have to be done before the plan is materialised fully.

"The balance sheets of the banks have to be prepared anew as per current market prices. The valuation of the assets has to be carried out to find out their exact worth and fix the price of the share accordingly," he said.

Kamal said the government will review the budget after the first quarter of the fiscal year to find out the obstacles facing the implementation amid the coronavirus pandemic and take steps accordingly.

"Of course, no new thing will be introduced in the review. Every quarter, we review the budget as per laws and it is reflected in the following quarter."

The parliament passed the Tk 568,000-crore budget for the fiscal year 2020-21 on June 30, which, experts say, may prove difficult to implement amid the coronavirus pandemic.

Kamal has set an ambitious economic growth target of 8.2 per cent and focused on health sector development and economic recovery. He would face challenges to keep the budget deficit in check amid rising expenditure and dwindling revenue collection.

The overall budget deficit is Tk 190,000 crore, which is 6 per cent of the GDP. The revenue collection target is Tk 378,000 crore.

In the first month of the fiscal year, the National Board of Revenue could not show an impressive performance on revenue collection.

This prompted the government to borrow around Tk 20,000 crore from the banking system.

The progress of the annual development programme was not impressive either in the first two months of the fiscal year.

Development expenditure fell 17.64 per cent year-on-year in July and 10.18 per cent in August as activities are yet to pick up because of the lingering coronavirus pandemic.

"We have to explore opportunities during the pandemic. We have to be flexible. We will take all the necessary steps to utilise the opportunities," Kamal said.

According to the finance minister, the government has developed the necessary infrastructure to attract investment.

Gas will be increasingly available. The government is purchasing liquified natural gas from the spot market for the first time in order to provide gas to industries.

"We are boosting our capacity to supply gas to heavy industries. Our infrastructure is okay. Once the Covid-19 is over, the investment would start flowing in."

The finance minister said some people criticised the government for reopening the economy, saying the situation would worsen.

The government had decided to resume economic activities while taking measures to contain the spread of the virus.

"Ultimately, the decision of the government became fruitful as the economy is gradually rebounding and the pandemic situation is improving," Kamal said.

"People are participating in the economy. So, I am hopeful that we will be able to achieve 8.2 per cent GDP growth."

Kamal also talked about the amnesty given to whiten the black money.

"If we don't see any progress regarding the amnesty, we will consider that there is no black money in the country," he said.     

The National Technical Advisory Committee formed to tackle the Covid-19 pandemic has advised the government to go for an advance payment in a bid to procure the Covid-19 vaccine quickly.

"If a booking is not made, vaccines would not be available easily as demand would be high," said Kamal. 

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