Dhaka, Bangladesh (BBN) - Association of Bankers, Bangladesh (ABB) has urged the central bank to ensure depositing the government’s fund with its member banks at rates below 6.0 per cent.
The leaders of ABB have also requested the Bangladesh Bank (BB) to intervene in the public sector banks for depositing their funds with the private commercial banks (PCBs) at maximum 6.0 per cent interest rate.
The ABB made the appeals at a meeting held at BB headquarters in the capital on Monday with BB Governor Fazle Kabir in the chair.
A six-member ABB delegation, led by its chairman Syed Mahbubur Rahman, attended the meeting.
Talking to the BBN, a BB senior official said the central bank governor may talk with the finance minister regarding depositing the government’s fund at interest rates below 6.0 per cent.
The government allowed the state entities to deposit 50 per cent of their funds with the PCBs instead of the previous 25 per cent to meet their growing demand for liquidity.
The state-owned enterprises (SoEs) provide deposits to the banks, particularly to the PCBs, at interest rates ranging between 9.00 per cent and 10.50 per cent, according to the banking sector insiders.
On the other hand, the state-owned commercial banks (SoCBs) are now providing term deposits to other banks, particularly to the PCBs, at rates between 8.50 per cent and 9.50 per cent.
The PCBs are forced to offer higher interest rates on deposit to comply with the advance-deposit ratio (ADR) rules and the commitments made to their clients, they explained.
Around BDT 1.80 trillion government funds has been deposited with all the scheduled banks, another BB official said.
BBN/SSR/AD