Dhaka, June 28 -- BNP lawmaker AM Mahbub Uddin Khokon has proposed scrapping Tk 500 and Tk 1,000 banknotes, arguing that large amounts of cash are being kept in homes because people have lost confidence in banks.

The Noakhali-1 MP said people should be given two months to deposit the notes in banks and legalise undeclared money, a move he believes would increase liquidity in the banking sector and help reduce the budget deficit.

He made the proposal on Sunday while taking part in the general discussion on the proposed 2026-27 national budget in parliament.

Khokon said the country's banking sector had been badly damaged.

"Banks have been looted. Why does Bangladesh need so many banks? We don't need so many banks. Every MP wants a bank....