Finance Minister AMA Muhith said Monday the country's banking sector is bothered very much about the non-performing loans (NPLs) and argued that it has been a big problem since the independence when it reached 40 per cent of total outstanding loans.
"But now it has come down to almost one digit and, hovering between one and two digits," he told a meeting with a visiting Norwegian investment delegation at his secretariat office.
Kristin Clemet, chairperson of Norfund, the Norwegian government's investment fund for developing countries, led the 15-member delegation. Norwegian Ambassador to Dhaka Sidsel Bleken was also present at the meeting.
The minister said the banking sector has grown very fast and some people would say that the number of banks is very high.
"Yes, we have 48 banks but I am not very much worried about it," he said, adding that the banks would consolidate if any adverse situation arises. He also acknowledged problems in the private sector banks.
For the problems in banking sector, Mr Muhith blamed lack of proper enforcement of rules and regulations. "I must say we have not enforced regulations strictly. Now the central bank started taking strict measures."
Briefing the Norwegian delegation about adverse remarks on Bangladesh's state of doing business, he blamed law and order situation and poor salaries of the public servants while claiming that the situation has by now improved significantly.
For improving the condition of doing business, he said, Bangladesh Investment Development Authority (BIDA) has been formed to facilitate trade and investment by simplifying the rules and providing necessary support.
"Now Bangladesh is very well prepared for attracting foreign direct investment," he added.
While portraying the development history of Bangladesh, the minister said that almost 16 years had been spoiled when no development took place in the country. "So, we have a development history of 30 years."
He said the welfare society began in the country when the Bangladesh Awami League (AL) came to power in 1996, but the successive 'partisan government' rejected all the steps taken by the AL government.
The minister said that during the last 10 years with the AL in the office, the per capita income increased significantly while the growth rate ranging between 6.6 per cent and 6.7 per cent, followed by around 7.0 per cent during the last two years.
During the initial period of Bangladesh, he said, the rate of inflation was extremely high at around 45 per cent. "Now we are very cautious about it and this government kept the inflation rate below 5.0 per cent."