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Body to recommend single-digit lending rate for industries

Staff Correspondent | Published: 00:13, Dec 12,2019

 
 

The seven-member committee on single-digit lending and deposit rates implementation is likely to submit its report to the central bank today, recommending single-digit interest rate on industrial loans.

The committee, headed by Bangladesh Bank deputy governor SM Moniruzzaman, that held several meetings to finalise recommendations, may submit its report to BB governor Fazle Kabir, said BB officials.

The committee is likely to recommend interest rate on industrial term loan at 9 per cent and arrangement of deposit of government fund at 6 per cent interest for banks, said an official.

The committee was formed following criticism over government and banks’ inaction over their pledges to bring down lending rate to 9 per cent and deposit rate to 6 per cent.

Other members of the committee are: Agrani Bank chairman Zaid Bakht, Standard Bank chairman Kazi Akram Uddin Ahmed, Rupali Bank managing director and chief executive officer Obayed Ullah Al Masud, Mutual Trust Bank managing director and CEO Syed Mahbubur Rahman, IFIC Bank managing director and CEO Saleh Ahmed Sarwar and NRB Bank managing director and CEO Mehmood Husain.

A BB official said that all the state-owned commercial banks implemented lending rate at 9 per cent while only two private banks brought down the rate to single-digit.

The banks while implementing 9-per cent lending rate, however, faced trouble as they did not get deposit at the rate of 6 per cent from the government and other sources, he said.

The amount of industrial term loans stood at Tk 2,43,825.17 crore as of June 30, 2019.

In June last year, the Bangladesh Association of Banks first announced that

they would bring down the lending and deposit rates to 9 per cent and 6 per cent respectively by July of the year.

After the deadline was missed, the then finance minister, AMA Muhith, on August 2 declared that the single digit lending and deposit rates would come into effect from August 9.

The committee on setting single-digit bank rates was formed on December 1 after finance minister AHM Mustafa Kamal had held a meeting with BAB leaders on the same day.

The committee was asked to submit report in seven working days. 

The government has fulfilled a set of demands from the banks to facilitate the interest rate implementation.

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