NBFIs want state banks' deposits to lower interest

Non-bank financial institutions have demanded low-cost deposits from state banks like private banks so that they can lend at single digit interest rate.

The development comes after the NBFIs yesterday sat with the Bangladesh Bank governor and sought policy support from him such as deposits from the state banks at 6.5 percent interest rate.

The private banks earlier sought the same support, which the central bank obliged to. Earlier on Monday, the central bank asked state banks to deposit their funds with private banks at 6 percent interest.

From July 1 banks started to bring down the lending rate to 9 percent. At the meeting, the NBFIs also promised to bring down the interest rate to single digit immediately after getting the policy support.

“Bangladesh Bank has assured the NBFIs of extending policy support to lower the interest rates,” said Abu Hena Mohd Razee Hassan, deputy governor of the BB. Md Khalilur Rahman, chairman of the Bangladesh Leasing and Finance Companies Association, told reporters after the meeting at the BB headquarters that the NBFIs would place the single digit issue before their respective boards immediately and try to implement it within the shortest possible time.

The NBFIs will firstly decrease the interest rate on women entrepreneurs, SME-related manufacturing sector and export-led businesses, said Rahman, also managing director of the National Housing Finance and Investments Ltd.

It is easily possible to decrease the lending rate if the NBFIs are allowed to receive deposit from banks at a lower rate.

The state banks and private banks decided on June 21 to lower the interest rate on lending and deposit to 9 percent and 6 percent respectively.

The move comes weeks after the government showered them with a raft of privileges, drawing criticism from different quarters.