Dhaka, Bangladesh (BBN)– Nearly 20 private commercial banks (PCBs) have already lowered the interest rates on fresh deposits by keeping their lending rates unchanged.

The PCBs have slashed their interest rates on deposit around 2.0 percentage points as part of their ‘preparation’ ahead of the execution of the single-digit interest rate on both lending and deposit.

The downward revision of the deposit rates comes much ahead of the date—April 01 next— announced by Finance Minister AHM Mustafa Kamal during his meeting with the chairmen and managing directors of the PCBs on December 30 last.

The banks are now trying to keep their spread at a ‘rational level’ for minimising the impact on the single-digit interest rate – 6.0 per cent on deposits and 9.0 per cent on lending barring credit cards –on their profitability, according to senior bankers.

The downward revision of the deposit rates have already come into effect from January 2020.

The PCBs are expected to start re-fixing their interest rates on lending in line with the Bangladesh Bank’s (BB) upcoming circular in this regard, they explained.

The central bank is expected to issue a relevant directive at an appropriate time, asking all the scheduled banks to bring down their interest rates on both lending and deposit to single-digit from existing level.

The bankers had expressed their fear that deposits in the banking sector might decline in the near future mainly due to unattractive interest rates.

Besides, liquidity pressure on the market is likely to intensify in the coming months on the same grounds, they explained.

The banks, particularly PCBs, are now offering varying rates of interest on fixed deposits, particularly for three-month, six-month and one-year, ranging from 5.50 per cent to 10 per cent. It was 3.50-11.50 per cent earlier.

The banks offered interest rates on savings accounts ranging between zero per cent and 4.50 per cent against 1.00-6.60 per cent a month back.