The Parliamentary Standing Committee on Finance Ministry yesterday directed to the Bangladesh Bank to look into the reason why 29 non-banking financial institutions (NBIs) did not enlist in the stock market by the earlier stipulated deadline, September 2006. At its meeting on financial affaires, the parliamentary watchdog also recommended all non-banking financial institutions to invest in the stock market.

Chaired by the committee-chairman ANH Mostofa Kamal alias Lotus Kamal, M K Anwar, Prof Md Ali Ashraf, AKM Maidul Islam, Motiur Rahman, Tajul Islam and Golam Dastagir Gazi were present, among others, at the meeting. Later, at a press briefing at the Jatiya Sangsad Media Centre, Lotus Kamal also said that the meeting reviewed the real situation of sector-based investment, capital and reserve of the non-banking financial institutions, apart from banking sector.

For the non-banking financial institution, the meeting suggested doubling the paid-up capital to Tk 50 crore from the present chunk of Tk 25 crore by 2011 and for the banks, it is Tk 400 crore. There are 29 Non-banking Financial Institutions in the country which hold a total of Tk 16,000 crore in their coffers for investment, Lotus Kamal also said. The head of the committee said they also viewed that it would be good to reduce at least two-and-a-half per cent income tax for the non-banking financial institutions as their area of income is limited. The representatives of non-banking financial institutions raised a demand in the meeting for reducing their income tax as they have to pay 42.5 per cent income tax, same as banking sector. But the banking sector has a wide area of income while the non-banking financial institutions' domain is limited.

Regarding another demand, for providing some portion of the government funds to the non-banking financial institutions, Lotus Kamal said the committee suggested providing some amount of the government funds to the institutions. "The central bank has taken the matter into consideration," he said. The meeting also suggested the non-banking financial institutes to open their braches at rural areas as they are investing in those sectors where banks did not come up. The standing committee also recommended to make 'Ortho Rin Adalat' more effective.

-The Independent

JS body for keeping govt fund in NBFIs

The Daily star: A parliamentary body on Tuesday recommended the government to keep its fund in non-banking financial institutes (NBFIs) along with different commercial banks so that NBFIs can gain more using the fund. The Parliamentary Standing Committee on Finance Ministry also recommended the National Board of Revenue (NBR) to cut-off the tax rate of non-banking financial institutes by two and a half percent.

"Financial management of the non-banking financial institutes are well and good and they alone maintain the fund of Tk 16 thousand crore. If the government keeps its fund in the non-banking financial institutes, they will be able to gain more using that fund," AHM Mostafa Kamal, chairman of the committee told reporters after the meeting held at the Jatiya Sangsad Bhaban.

Both public and private banks have the opportunity to do more business as the government keeps its fund only there," added Mostafa Kamal, who is popularly known as Lotus Kamal. "The committee also recommended reducing the tax rate of non-banking financial institutes comparing to commercial banks," Mostafa Kamal, also a ruling Awami League lawmaker said.