Pvt banks seek govt deposit with low interest for rate cut

Staff Correspondent | Published: 21:07, Jun 25,2018

 
 

A file photo shows the Bangladesh Bank headquarters at Motijheel in Dhaka.-- New Age

Private banks on Monday requested Bangladesh Bank to provide them with the government deposits at lower interest rate for implementing their decision to cut the interest rate on lending to 9 per cent from July.
Representatives of Association of Bankers Bangladesh made the call at a meeting with Bangladesh Bank governor Fazle Kabir at the BB headquarters in the city.
ABB chairman Syed Mahbubur Rahman, also the managing director and chief executive officer of Dhaka Bank, after the meeting told reporters that the banks would implement the decision of sponsors and board of directors to cut the interest rate on lending to 9 per cent.
‘The interest rate of new investment [loan] would be 9 per cent from July 1. It is a national-level decision. We have to implement it. But, we [banks] have to be supplied liquidity,’ he said.
He said that although a decision was taken to keep 50 per cent of the total deposits of government agencies with private bank, it was yet to be implemented.
Besides, there is bigger liquidity with the state-owned commercial banks, he said.
‘The liquidity of these banks should also come to the private banks. The interest rate of these funds must be around 5-6 per cent,’ he said.
He also said that the central bank should also ensure that the government agencies would not seek interest rate at over 5-6 per cent for their deposits to the private banks.
BB officials said that the central bank would give any necessary policy support, even by giving some concession, to the banks for lowering the interest to single digit.
They said that the governor would discuss the banks’ demand with finance minister AMA Muhith.
BB deputy governors Abu Hena Mhd Razee Hasan and SM Maniruzzaman and ABB’s former chairman and Mutual Trust Bank managing director and CEO Anis A Khan were present, among others, at the meeting with the governor.
Following the bank owners’ claim of liquidity crisis in January this year, the government met the bank owners’ demand for depositing 50 per cent of funds instead of 25 per cent by the state-owned agencies in the private banks.
The bank owners also realised their demand for lowering the bank rate to 6 per cent from 6.75 per cent and cash reserve requirement to 5.5 per cent from 6.5 per cent on the pretext of liquidity crisis.
The central bank at the same time extended the advance deposit ratio adjustment deadline for the banks to March 31, 2019 from December 31, 2018.

More about:

Want stories like this in your inbox?

Sign up to exclusive daily email

Advertisement

images

 

Advertisement

images