Vol. 5 Num 816 Tue. September 12, 2006  
Front Page

Offloading NCB Shares
Saifur shifts task to caretaker govt

Finance Minister M Saifur Rahman yesterday said the next caretaker government will be able to take decision for off-loading shares of three nationalised commercial banks (NCBs) in the process of privatising those.

"I am confident that the interim government will be formed with learned people at the end of our tenure, and they will take the decision," Saifur told reporters after a meeting with a visiting IMF mission.

Asked about the caretaker government's jurisdiction to take such a 'policy decision', the finance minister said, "This is not a complicated issue and proposal is ready. The interim government will be able to take the decision considering it as part of its regular duties."

He went on, "We had plans to off-load one third shares of these banks in the stock market like those of Rupali Bank to increase the banks' capital as well as make the share market vibrant," he said. But the present government dose not have adequate time to convert the NCBs into companies, he added.

The government's five-year tenure expires on October 28.

At the meeting with the IMF mission, Saifur explained the government position on privatisation of the NCBs.

The mission led by Thomas Rumbaugh, adviser of the Asia Pacific Department of the IMF, is visiting Bangladesh before releasing sixth instalment of the Poverty Reduction Growth Facility (PRGF) loan.

As a precondition for disbursement of the sixth instalment, the government was supposed to turn the three NCBs into companies like Rupali Bank.

A proposal in this regard was placed at the cabinet meeting last month but the cabinet sent it back for more scrutiny.

At yesterday's meeting, the IMF mission asked the government to adjust prices of energy products including fuel and power. It also expressed dissatisfaction over the low revenue collection. But the finance minister said it is not possible for the government to increase prices of fuel ahead of the general election.

Thomas Rumbaugh said the government has agreed with the mission that fuel prices should be adjusted, and Bangaldesh needs to increase revenue collection. "It is the government's decision now when it will increase fuel prices."

Saifur said, "Lesser fuel price is like haemorrhage to our economy--the loss is too much--and it will be very hard to cover that whoever comes next. The adjustment is very much needed but it is quite a difficult business to do that in this cycle of election.

"We will not take any decision that will disturb peace in the country."

On the possibility of getting sixth instalment of the loan, the minister said the IMF has put a number of conditions and now it is offering half of the $ 80 million instalment. "But we are hopeful of getting the total money at a time."

Saifur however said the government would revise the national budget if it does not get the loan finally.

Asked about the mission's condition that a huge tax exemption for industrial sector has to be withdrawn, the minister said, " I also agreed with the mission that such a huge tax exemption put pressure on the overall economy but government decision is needed for withdrawing the tax exemption."