Interest rates of bank deposits will come down to single digit within a month, says Finance Minister AMA Muhith.

His remarks came on Sunday, when he was addressing the annual conference of state-owned Janata Bank at a Dhaka hotel.

“Banks are providing long-term loans based on short-term deposits, which is not good at all for the financial sector,” said Muhith adding the stock market can be the alternative for capital.

“I have decided to form a small group within the next one or two months and put them in charge for developing the capital market.”

Brushing aside a possible economic downturn in the year of election, Muhith said the economy might grow by 7.5 percent in the current fiscal.

On spiraling interest rates, he said, “I am not sure why it has gone up. There may have been a liquidity crisis with the national elections ahead. But it’s imperative to contain inflation in the year of election.”

In an effort to address the liquidity crisis in banks, government organisations will now keep 50 percent of their funds with private commercial banks, said Muhith.