Finance minister asks ICB to be efficient and competitive

Finance Minister Amir Khosru Mahmud Chowdhury has asked the state-run Investment Corporation of Bangladesh (ICB) to become more efficient and competitive after the institution sought Tk 10,000 crore in government funding.

“ICB’s competitors in the private sector are smart and intelligent. They are more connected with the market, both globally and locally. ICB has to reach that position,” he said yesterday while speaking as the chief guest at a programme at Hotel Purbani to mark ICB’s silver jubilee.

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“You have to be market-based. You have to be competitive, you have to be efficient, and you have to be professional. No enterprise can run on government blessings. Even if it is a government enterprise, you have to be market-based,” said the minister.

Stating that the ICB was established to help make Bangladesh’s economy market-based, he said the idea was that the savings of ordinary people would flow into ICB and directly contribute to capital formation, thereby helping the economy.

Established in 1976 under an ordinance, ICB was part of a series of measures taken by the government to accelerate industrialisation and develop a well-organised and vibrant capital market, particularly the securities market.

Although ICB’s flagship unit funds once generated substantial returns, the corporation has incurred huge losses in recent years, mainly because of bad investments.

Speaking about the capital market, the finance minister said the current commission was introducing a number of deregulation measures and that more would follow.

“We are moving towards global best practices.”

Mentioning that for the first time in Bangladesh’s history, the prime minister held a breakfast meeting with major Wall Street firms, Khosru said 15 companies were represented at the meeting and collectively managed $36 trillion.

He said the meeting went very well and that everyone expressed confidence in the way Bangladesh’s current market-based economy is moving and in the policy leadership.

“They are willing to come to Bangladesh… And they will come to Bangladesh. Some will come earlier, some later. So, we have to prepare accordingly. We should be ready for that,” said the minister.

He lauded the Bangladesh Securities and Exchange Commission (BSEC), saying the regulator is doing a very good job and will continue to do so.

“There will be a lot of deregulation, everything will be automated. And ICB has to move to a fully digitalised form. No paper transactions, nothing on paper, no paper!” Khosru said.

Also speaking at the programme, BSEC Chairman Masud Khan said ICB would have to undertake rebalancing, even if necessary by accepting losses.

“The most important things are accountability, professionalism and ensuring trust in order to compete with several private companies that are excellent in their activities,” he said.

ICB Managing Director Niranjan Chandra Debnath highlighted various aspects of the institution and sought Tk 10,000 crore in funding to help it overcome its current difficulties.

ICB Chairman Prof Abu Ahmed said that although he had supported a market economy throughout his life, he was seeking some government funding to keep the institution alive.

He said reforms could be carried out at the institution if necessary, but if it received some funding afterwards, ICB would be able to play a positive role in capital formation in the country.

Nazma Mobarek, secretary of the Financial Institutions Division (FID) of the finance ministry, said ICB fell into its current difficulties because it invested without conducting proper market analysis.

“ICB needs to pay more attention to market analysis. Even when share prices declined, it should have applied its professionalism. If it had done so, it would not have reached this situation,” she said.

She also said problems arose when ICB borrowed money from banks at high interest rates to make investments.

“The current management is demonstrating its efficiency, which is why it has been able to manage the Tk 4,000 crore provided so far properly,” she said.

Going forward, ICB should focus on improving efficiency, increasing recovery and accelerating digitalisation, she added.

Md Khairuzzaman Mozumder, secretary of the finance ministry, and Md Ziaul Haque Khondker, a former chairman of the BSEC, along with a former managing director of the ICB, also spoke at the programme.