Interest rates were raised on deposits and reduced on lending by commercial banks in the current month aiming to narrow the spread.
At least 12 commercial banks raised the interest rates on deposits in August to encourage people to keep their money with the banks.
The banks have raised the interest rates on deposit by 0.25 to 1.0 percentage points to collect fresh fund from general depositors, officials said.
On the other hand, at least 10 out of 48 banks have reduced interest rates on lending this month in line with the commitment made by the Bangladesh Association of Banks (BAB) to the central bank.
"Some banks, especially private commercial banks (PCBs), have slashed their interest rates on industrial term loans and working capital for productive sectors on the basis of BAB commitments," a senior official of the Bangladesh Bank (BB) told the FE Tuesday.
On March 3 last, the BAB proposed to the central bank that they would reduce interest rates on industrial term loans to 14.75 per cent from the existing 16.00 per cent while the interest rates for the productive sector will be brought down to 14.50 per cent from existing 15.50 per cent.
The central bank expects more banks to cut their lend ing rates on productive sectors from the next month, he added.
He also said the spread between interest rate on lending and deposit may slightly come down during April-June period of this year.
The weighted average spread between lending and deposit rates in the country's banking sector came down to 5.75 per cent in March last from 6.05 per cent in December, according to the central bank statistics.
The country's commercial banks currently offer interest in the range between 5.25 per cent and 13.50 per cent on fixed deposit schemes while the rates for saving accounts varies between 2.50 per cent and 8.00 per cent, the BB's data showed.
Bankers and experts, however, said the real interest rate in the country is still low and, to some extent, negative because of high inflation rate that was 10.04 cent in June last. As a result, the banks are raising the interest rates on deposit to attract more deposits from their clients.
The country's consumer price index (CPI) inflation crossed double digit figure at 10.04 per cent on the point-to-point basis in June from 7.44 per cent in May 2008.
The banks' lending rates on working capital to large and medium scale industry range between 11 per cent and 16 per cent while small industries between 11.50 per cent and 16.50 per cent.
Currently, the banks provide loans to large and medium scale industries at interest rates ranging between 11 per cent and 16 per cent.
Interest rates on housing loans range between 10 per cent and 16.50 per cent and consumer credit 10.50 per cent and 19.00 per cent.
