Dhaka, Bangladesh (BBN)– At least 11 commercial banks slashed interest rates on deposits this month with a view to reducing their cost of funds while the interest rates on lending were almost stable, bankers said.

“We’ve slashed the interest rates on deposits to help reduce the cost of funds and maintain an acceptable spread between return on loans and the cost of deposits,” Managing Director and Chief Executive Officer of the Agrani Bank Syed Abu Naser Bukhtear Ahmed said while explaining the main objective of the latest initiative.

The country’s commercial banks now offer interest rates ranging from 1.25 per cent to 10.03 per cent on fixed deposit schemes, while the rates for savings accounts vary between 1.00 per cent and 8.00 per cent, according to the central bank statistics, released on Monday.

“We’ve re-fixed the interest rates on deposit in line with the market demand as well as profitability of banks,” a chief executive of a leading private commercial bank said.

On April 19 last, the central bank asked the commercial banks to fix the interest ceiling on lending in five specific areas at maximum 13 percent to help mitigate the impact of the global economic meltdown.

Currently, the banks provide loans to large and medium scale industries at interest rates ranging between 11 percent and 13 percent and to small industries at rates between 10 percent and 18 percent.

Interest rates on housing loans range between 12.50 percent and 13.00 percent and consumer credits between 11.50 percent and 19.25 percent, the BB’s data showed.

BBN/SS/SI/AD-21October09-1:11 am (BST)