Bangladeshi lawmaker proposes temporary withdrawal of Tk500 and Tk1,000 notes.

A ruling party lawmaker has proposed temporarily withdrawing Bangladesh's 500 and 1,000 taka banknotes from circulation, arguing that the move would encourage people to deposit large amounts of cash into the banking system.

Barrister A.M. Mahbub Uddin Khokon made the proposal on Sunday while speaking during the general discussion on the proposed 2026-27 national budget in the 17th sitting of the second budget session of Bangladesh's 13th National Parliament.

Khokon said many people are keeping cash at home instead of depositing it in banks. He also claimed that individuals who have fled the country left behind significant amounts of cash.

He proposed giving holders of 500 and 1,000 taka notes one to two months to deposit the bills in banks. According to him, the measure would bring a substantial amount of money back into the formal banking system.

The lawmaker also suggested allowing individuals who cannot fully explain the legal source of their funds to regularize the money by paying a tax of 20% to 25%. He argued that such a policy would increase bank deposits, boost investment, and improve liquidity in the economy.

Khokon also called for reducing the number of banks operating in Bangladesh, saying the country's banking sector has become overcrowded.

"There is no shortage of banks, but many have been looted," he said. "Bangladesh does not need so many banks. We must reduce their number and ensure the safety of people's deposits instead of using public money to cover banking losses."

The proposal reflects the lawmaker's personal recommendations during the parliamentary budget debate. No government decision or policy change regarding the withdrawal of the 500 and 1,000 taka notes has been announced.