No banks cut interest rates on lending this month

FE Report | Published: February 26, 2009 00:00:00 | Updated: February 01, 2018 00:00:00

None of the local as well as foreign banks cut their interest rates on lending this month whereas nine commercial banks increased their interest rates on deposits to lure potential clients.

The central bank has already sent letters to seven commercial banks asking them to reduce their interest rates on lending in line with the Bangladesh Association of Banks (BAB) commitment, officials said.

"We've asked the banks to bring down their interest rates on lending on the basis of BAB proposals," a senior official of the Bangladesh Bank (BB) told the FE, adding that the central bank is pursuing the banks continuously to reduce interest rates on lending by improving their efficiency.

On March 3, 2008, BAB proposed to the central bank to 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.

"Some banks have increased their interest rates on deposits aiming to improve their credit deposit ratio position by mobilising fresh funds from public," a senior treasury official of a private commercial bank told the FE Wednesday.

The country's commercial banks currently offer interests 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, according to the central bank statistics.

Currently, the banks provide loans to large and medium scale industries at interest rates ranging between 11 per cent and 15 per cent and to small industries between 10 per cent and 16.50 per cent.

Interest rates on housing loans range between 11.50 per cent and 16.00 per cent and consumer credits 10.50 per cent and 19.00 per cent.

The banks' lending rates on working capital to large and medium scale industries range between 10.50 per cent and 16.00 per cent and for small industries between 10.50 per cent and 18.00 per cent, the BB's data showed.