BNP lawmaker A.M. Mahbub Uddin Khokon has proposed the temporary withdrawal of Tk 500 and Tk 1,000 banknotes in an effort to bring cash held outside the banking system back into formal circulation.
The proposal was made on Sunday during the general discussion on the proposed national budget for the 2026–27 fiscal year in the Jatiya Sangsad (National Parliament).
Highlighting the growing lack of confidence in the country’s banking sector, the Noakhali-1 MP said many people are now choosing to keep their money at home instead of depositing it in banks. He also alleged that individuals involved in past money laundering and beneficiaries of the previous authoritarian regime continue to hold large amounts of cash outside the banking system.
“If the government temporarily withdraws the Tk 500 and Tk 1,000 notes and allows people two months to deposit them in banks, undeclared money could be legalized upon payment of a 25% tax,” Khokon told Parliament.
According to the BNP legislator, such a measure would help reduce the budget deficit, increase liquidity in the banking sector, and channel more funds into productive investment and economic activities.
Khokon also called for reducing the number of banks operating in the country, arguing that Bangladesh currently has more banks than necessary. He stressed that restructuring the banking sector is essential to safeguard depositors’ money and reduce the recurring need for government support to cover financial shortfalls in troubled banks.
Describing money laundering as one of the country’s most serious economic challenges, he said recovering funds already transferred abroad would be extremely difficult. Instead, he urged the government to create a financial environment that encourages people to invest domestically.
“Passing laws alone is not enough. The entire financial system requires comprehensive reform to restore public confidence,” he said.
Addressing the challenges of implementing the proposed budget, Khokon also highlighted concerns over law and order and rising unemployment. He warned that lasting economic stability would not be possible without creating employment opportunities for the country’s large youth population.
The BNP MP further remarked that budget deficits are common in many countries and are not unusual. He added that the proposed 2026–27 national budget had been prepared under difficult economic circumstances under the leadership of the Prime Minister and the Finance Minister.
