BNP lawmaker AM Mahbub Uddin Khokon on Sunday proposed withdrawing all existing banknotes from circulation and requiring people to deposit their cash in banks within one or two months, allowing holders of undisclosed money to legalise it by paying a 25 percent tax.
Participating in the general discussion on the proposed national budget for the 2026-27 fiscal year in Parliament, he claimed such a move will bring large volumes of cash into the banking system, boost liquidity and generate fresh investment, helping the economy regain momentum.
The Noakhali-1 MP said Bangladesh must overhaul its financial system to curb money laundering, restore public confidence in banks and stimulate investment, arguing that existing mechanisms have failed to bring back illicit funds sent abroad.
He said successive governments had spoken about money laundering since independence, but no significant amount of the laundered money had been recovered. "Once money enters the global financial system, there is virtually no opportunity to bring it back," he said.
Khokon argued that people keep their wealth where they feel secure, comparing it with how families safely store gold and cash at home when they trust their surroundings.
He said Bangladesh should reform its financial system so that people feel confident enough to keep and invest their money in the country.
Referring to financial centres such as Singapore, Dubai, Canada and Thailand, the MP said Bangladesh should adopt a more effective system to encourage capital to remain within the country.
He also questioned the need for the large number of banks operating in Bangladesh. "There is no need for so many banks. It seems that whenever someone becomes influential or enters politics, they want a bank or a leasing company," he said, calling for the closure of unnecessary financial institutions.
Khokon alleged that people lost confidence in banks and were increasingly holding cash outside the banking system.
He also stressed that improving law and order will not be possible without creating employment opportunities for millions of unemployed young people. "We cannot expect a better law-and-order situation while leaving millions of youths unemployed. Employment generation must be a priority," he said.
Despite pointing out weaknesses, Khokon described the proposed budget as a forward-looking plan for the country's development.
He noted that it contained various social protection measures, including Family Cards and Farmers' Cards, which will channel money to grassroots communities and boost economic circulation.
The lawmaker, however, observed that a substantial portion of the proposed Tk 9.38 trillion budget will be spent on government operations, salaries, pensions, infrastructure maintenance and servicing interest on previous loans, leaving comparatively limited fiscal space for development initiatives.
He also defended the present government's economic management, saying the administration, led by the finance minister, inherited an economy weakened by widespread looting and financial mismanagement.
Khokon said the relatively restrained criticism of the budget in Parliament reflected difficult economic circumstances inherited by the government rather than the absence of shortcomings.