Funds from capital market should drive financing, not loans or taxes: Adviser Salehuddin

Finance Adviser Salehuddin Ahmed has said that to meet financial needs, the focus must be shifted to raising funds from the capital market rather than through loans and taxes.

While speaking at a seminar titled “Unlocking Bangladesh’s Bond and Sukuk Markets: Fiscal Space, Infrastructure Delivery and Islamic Money Market Development” jointly organised by the Bangladesh Securities and Exchange Commission (BSEC) and the Dhaka Stock Exchange (DSE) at the DSE Tower today (22 September) he warned against over-reliance on loans, saying it has contributed to rising default culture.

“Private sector participation in bonds is very poor. To meet financial needs, we must raise funds from the capital market rather than through loans and taxes,” he said.

He added that the capital market should not be seen as a place for indefinite profit-making, urging greater financial literacy and a long-term investment culture.

On sukuk, he said, “These instruments must be backed by real, financially viable assets—not fragile ones like derivatives.”

Salehuddin also flagged the challenges of pension fund management, as these are public funds under government custody. “If the entire fund is invested, how will the government meet obligations when people need the money?” he asked.

At the event, Bangladesh Bank Governor Ahsan H Mansur said a joint task force of the central bank and BSEC has been working on bond market development, providing specific recommendations to the government.

He highlighted that globally, $130 trillion worth of bonds have been issued, making it the largest financial market.

“Banks can provide loans for five to six years, but not for more than 10 years. Long-term assets should be financed through bonds. Even saving certificates should be tradable in the secondary market,” he said, while calling for reforms in the pension system to ensure its sustainability through long-term investment.