MP proposes temporary withdrawal of Tk 500 and Tk 1,000 notes

Ruling party MP Barrister A M Mahbub Uddin Khokon has proposed temporarily withdrawing Tk 500 and Tk 1,000 notes from circulation and requiring them to be deposited in banks within a specified time. He believes this would bring a significant amount of cash held outside the banking system back into the formal economy.

He made the proposal during the general discussion on the proposed budget for the 2026-27 fiscal year in the 17th sitting of the 13th National Parliament's second (budget) session on Sunday, June 28.

Mahbub Uddin Khokon said many people keep cash at home instead of depositing it in banks, and those who have fled the country have also left large amounts of cash in their homes. If the notes were required to be deposited within one to two months, that money would return to the banking system.

He added that those unable to prove the source of their funds could legalise them by paying 20 to 25 per cent tax. This would increase bank deposits, boost investment and improve liquidity in the economy.

The MP also criticised the banking sector, saying there are more banks than needed and many have been looted. "What is the need for so many banks? Every MP gets a bank, every leader gets a leasing company — this trend must stop," he said.

He called for reducing the number of banks to a rational level and ensuring the safety of public deposits.

However, the proposal remains a personal opinion. No official decision or announcement has been made by the government or Bangladesh Bank regarding the temporary withdrawal of the notes.