Four banks raise deposit rates, 8 cut lending rates

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FE Report
The country's banking sector witnessed a mixed trend in interest rates on deposits in the current month while the lending rates remained almost unchanged.
At least four commercial banks have increased their deposit rates while eight slashed the interest rates in April this year, according to the central bank statistics.
"Increase in interest rates on deposits will help reduce the overall interest rate spread of the banks as interest rates on lending remain almost unchanged," a senior official of the Bangladesh Bank (BB) told the FE Wednesday.
He also said the central bank is monitoring the interest rate spread closely.
The country's commercial banks now offer interest rates ranging between 1.25 per cent and 10.03 per cent on fixed deposit schemes, while the rates for savings accounts vary between 1.00 per cent and 8.00 per cent, the BB's data showed.
"The existing mixed trend in interest rates on deposits may continue until June this year following slashing of government bank borrowing target for this fiscal and also upcoming new national budget," a senior official of a commercial bank told the FE.
The finance ministry has already revised the government's bank borrowing target for fiscal 2009-10 (FY10) down to Tk 86.61 billion from the original Tk 167.55 billion, according to official figures.
He also said most of the entrepreneurs will maintain 'wait and see policy' for their fresh investments in different projects before announcement of the budget for fiscal 2010-11.