The overall interest rate spread in the country's banking sector fell below 5.0 per cent further in March this year after more than one year due to strict monitoring and supervision of the central bank, officials said.
The weighted average spread between lending and deposit rates offered by the commercial banks came down to 4.87 per cent in March, 2015 from 5.04 per cent in the previous month as the interest rates on lending decreased more than that of deposits.
The spread was 4.99 per cent in January, 2014.
On the other hand, the weighted average rates on deposits came down to 7.06 per cent in the same month from 7.19 per cent in the previous month while interest rates on lending dropped to 11.93 per cent from 12.23 per cent, according to the central bank statistics, released Tuesday.
The bankers, however, said the spread may fall in the coming months following sufficient excess liquidity with the banks.
"Most of the private commercial banks (PCBs) are compelled to slash their lending rates for attracting clients, particularly corporate ones," a senior official of a leading PCB explained.
Talking to the FE, SK Sur Chowdhury, deputy governor of the Bangladesh Bank (BB), said the central bank has been pursuing the banks to fix up their interest rate rationally for the purpose of creating investment- friendly environment.
"We've a plan to bring down the spread to nearly 4.0 per cent shortly," the deputy governor noted.
He also said the bankers are now lending on prudential basis that helped them bring down the spread below 5.0 per cent from earlier level.
"We're expediting the implementation of financial inclusion programmes to channelise the loans to the productive sector which will contribute a lot to the socio-economic development of the country," Mr. Chowdhury observed.
The spread being maintained by at least 20 commercial banks out of 56 still ranges between more than 5.0 and 10.29 per cent.
Average spread of the five government-owned commercial banks (SoCBs) is 3.35 per cent, PCBs 5.25 per cent, foreign commercial banks (FCBs) 7.85 per cent and specialised banks (SBs) 1.27 per cent.
Country's business community earlier urged the central bank governor to take initiative to lower the lending rates to facilitate business activities, particularly to help augment industrialisation in the country.
siddique.islam@gmail.com
Interest rate spread in banks falls below 5.0pc in March
FE Report | Published: May 06, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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