Country’s scheduled banks have started working to adjust loan interest with clients after lowering the lending rate to a single digit as per the decision of the Bangladesh Association of Banks
(BAB) taken recently.
“As per the BAB’s decision, each bank is bringing down their interest rate to a single digit. Banks are implementing this decision,” chairman of the Association of Bankers Bangladesh (ABB) Syed Mahbubur Rahman told BSS.
BAB, an association of private commercial banks, at a recent meeting decided to bring down the lending rate to a single digit and deposit rate for the three months tenure to six percent from July 1, the first day of fiscal 2018-19.
Mahbubur Rahman, also managing director of Dhaka Bank Limited, said his bank is working on lowering the lending rate. “We will also bring down the variable interest rate of existing loans as soon as possible,” he added.
He said the single digit interest rate against bank lending will surge in private sector investment that will help take the country’s economic growth at a sustainable level.
Talking to BSS, chairman of Mercantile Bank Limited (MBL) AKM Shaheed Reza said the MBL board of directors has already taken initiatives to implement the BAB’s decision. “MBL is working to lower the interest rate. The variable interest rate of the existing loans will also come down to a single digit,” he added.
He said the single digit interest rate will boost up further the country’s economy, which will help achieve the country’s development goals, including Vision-2021 and Vision-2041.
Bangladesh Bank Deputy Governor Abu Hena Mohd Razee Hassan said BB is continuing its ethical pressure on banks to bring down the lending rate to a single digit for accelerating the country’s economy.
“This is the own decision of individual banks. BB monitors the interest rate only as per the rules and regulations,” he added.
Recently, BB has re-fixed the CRR at 5.5 percent for commercial banks on bi-weekly average basis from 6.5 percent. To tackle the liquidity crisis in the sector, the government has also taken a decision to allow state agencies to deposit 50 percent of their funds rather than 25 percent in private banks.
The government has also reduced the corporate tax rate for banks and financial institutions (FIs) by 2.5 percent in the budget for fiscal 2018-19.-BSS