The central bank has once again instructed banks to lower their lending rate to single digits as per instruction of the government and as committed by the sponsors of the lenders.
Banks should follow the directive on maintaining a 9 percent lending rate and 6 percent deposit rate in line with the promises made by the Bangladesh Association of Banks (BAB), a platform of the sponsors of private banks, last year, the central bank said at a meeting yesterday.
Bangladesh Bank Governor Fazle Kabir presided over the meeting at the central bank headquarters in Dhaka, where managing directors of all banks were present.
“We all have to give a collective effort to lower the lending rate to single digits,” Syed Mahbubur Rahman, chairman of the Association of Bankers, Bangladesh, a platform of the managing directors of private banks, told reporters after the meeting.
Banks have a responsibility to implement the agreed rate as the BAB has given its word to the government to do so, he said.
“But, this is not solely the duty of banks to bring down the interest rate on lending as depositors also have a role to play,” he said.
In 2017, banks cut down the interest rate on lending to single digits, helping the government keep up the growth momentum of the economy.
“We can do it again, but all stakeholders should respond to this end,” said Rahman, also the managing director of Dhaka Bank.
Md Serajul Islam, spokesperson and an executive director of the central bank, said the BB was now monitoring whether banks follow the 6-9 percent interest rates.
Rahman also said the central bank had also asked to lower the default loans and follow banking norms for the betterment of the financial sector.
“Default loans may decline in the second quarter this year. A majority of banks have informed the central bank that their non-performing loans have decreased significantly during the period.”
Currently, lending rates range between 12 percent and 15 percent and deposit rates hover around 10 percent.