10 banks hike deposit rate in Nov

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FE Report
At least 10 commercial banks raised interest rates on deposits this month, although lending rate remained almost unchanged, officials said.
"Many other banks may also increase deposit rates in the upcoming months to meet growing demand for cash," a senior official of a foreign commercial bank said Sunday.
He said banks prefer fixed deposits to savings by offering even higher interest rates to collect fresh funds from general depositors.
The country's commercial banks now offer interest rates upto 10.03 per cent on fixed deposits, while the rate for savings accounts is 8.50 per cent, according to the central bank statistics.
Term loans to large and medium-scale industries attract interest rates ranging between 11 per cent and 13 per cent while rates for small industries were fixed between 10 per cent and 18 per cent.
Similarly, interest rates on housing loans range from 9.99 per cent to 13.00 per cent and on consumer credits are between 11.50 per cent and 19.50 per cent.
Bank charge 10 to 13 per cent on working capital to large and medium scale industries and interests for small industries vary between 11.50 per cent and 17.00 per cent.
"The overall interest rate spread in the banking sector may narrow down in the near future if banks increase their interest rates on deposits, keeping the lending rates unchanged," a senior official of the Bangladesh Bank (BB) said.
He added that the central bank was monitoring the interest rate spread closely.
The interest rate spread of commercial banks went up slightly in June 2010, despite the central bank's efforts to keep it as low as 5.0 per cent.
The weighted average spread between lending and deposit rates in the banking sector rose to 5.27 per cent as on June 30, 2010, from 5.20 per cent in March last.
The weighted average rates on lending stood at 11.23 per cent in June last while the interest rates on deposit were paid at 5.96 per cent by the banks.
"We expect the interest rate spread would come down to 5.0 per cent from the existing level in the coming months," the BB official added.