Top managements of the country's banks, particularly the private commercial banks (PCBs), have agreed to bring down their interest rates on all loans, except on credit cards, at 9.0 per cent from the existing level from April 01, 2020, instead of tomorrow (January 01).
The decision was taken at a meeting of the chairmen and managing directors of all the PCBs with Finance Minister A H M Mustafa Kamal at the Bangladesh Association of Banks (BAB) office in the capital on Monday night.
The meeting also decided that the interest rate on deposits will be brought down to maximum 6.0 per cent instead of the existing level from April 01.
Different issues were discussed at the meeting, which included single-digit interest rate on all loans and mandatory deposit of the government's funds with the PCBs along with the public sector ones.
The government had decided to allow the state entities to deposit 50 per cent of their funds with the PCBs, up from the previous ceiling of 25 per cent, to minimise the cost of funds in banking sector.
"Single-digit interest rates will be applied on all loans, except on credit cards, from April 01, 2020," the finance minister told reporters after the meeting.
The government will take necessary measures to help the banks implement single-digit interest rates on both lending and deposit for a specific timeframe, Mr. Kamal said while replying to a query.
"We'll ensure depositing 50 per cent of our low-cost funds with the PCBs on the basis of their paid-up capitals."
A circular will be issued shortly in this connection, he added.
"We're committed to bring down the interest rate on all loans, except on credit cards, to 9.0 per cent from April 01, while interest rate on deposits will be fixed at maximum 6.0 per cent," the BAB Chairman Nazrul Islam Mazumder told the reporters.
The banks will re-fix the interest rates on both lending and deposit to protect interests of the economy as well as the country.
The banks will implement single-digit interest rates on all loans in line with Prime Minister Sheikh Hasina's directives, according to the BAB chairman.
Earlier, a central bank committee submitted its report to the Bangladesh Bank (BB) governor on December 12 with a set of recommendations, including offering single-digit lending rates to the industrial manufacturing sectors only.
The BB formed a seven-member committee, headed by its deputy governor S M Moniruzzaman, on December 01 to find out ways for bringing down the industrial lending rates to single-digit ones.
The committee also suggested the government to ensure mandatory deposit of the state entities' funds with the PCBs as per the rules concerned to properly implement single-digit interest rate on industrial loans.
It further recommended that the interest rates on large industrial (manufacturing) loans along with cottage, micro, small and medium industrial (manufacturing) credit be lowered to single-digit ones from the existing level.
Besides, large industrial (manufacturing) loans will include credits provided to the ready-made garment (RMG), textile, ship-building and ship-breaking, agro-based industry and similar other sectors, it added.
The borrowers from such industrial manufacturing sectors will get loans at 9.0 per cent interest rate instead of the existing level of around 12.00 per cent after implementation of the BB board's decision.
On December 24, the BB board of directors approved a proposal on single-digit lending rate for industrial manufacturers to facilitate the country's economic growth.
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