Dhaka, May 21 (V7N) — Bangladesh Bank Governor Dr. Ahsan H. Mansur has expressed concern that microfinance institutions charging interest rates as high as 26 percent may not be able to survive in the current competitive environment. He noted that many customers are now obtaining loans from agent bank branches at nearly half the interest rate, putting high-interest microfinance providers at risk of being eliminated from the market.

Dr. Mansur made these remarks during an event organized by the Policy Research Institute (PRI) on Wednesday.

Emphasizing the need to strengthen the financial sector, he stated his goal to increase the country’s foreign exchange reserves, which have recently declined from $48 billion to $20 billion, back up to $40 billion. He expressed hope that reserves would rise to $30 billion by next month.

On the issue of taxation, Dr. Mansur argued that financial transactions should be tax-free, cautioning that “the burden of Udor Pindi and Budor cannot be imposed on the necks of the poor.”

Meanwhile, the PRI released a comprehensive study covering the state of Bangladesh’s banking sector from 1971 to 2024. The study reveals stark disparities: while 75 percent of bank loans are disbursed, only 1 percent of account holders benefit from them. Similarly, 42 percent of bank deposits come from a mere 1 percent of account holders.

PRI’s Chief Economist Ashikur Rahman added that over the past five years, customers in Dhaka district accounted for 62.95 percent of loans and 51.8 percent of deposits, while customers in Chittagong accounted for 15.45 percent of loans and 13.5 percent of deposits.

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