Dhaka, Bangladesh (BBN)- Overall transactions on the country’s call money market have dropped by 47.53 per cent in the recent days as lender banks now prefer lucrative alternatives for higher earnings, bankers said.
The overall turnover on the inter-bank money market came down to BDT 27.96 billion on March 25-the last working day of the past week-- from BDT 53.29 billion on March 16, according to central bank's latest statistics.
"Lender banks prefer to invest our excess funds in inter-bank Repo and term deposits for higher earnings than that from the call money market," a senior official of a leading state-owned commercial bank (SoCB) told BBN in Dhaka.
Currently, five SoCBs are playing active role in the inter-bank money market.
The call rate ranged between 7.0 per cent and 8.0 per cent in the last seven working days--unchanged from the previous marks. But most of the deals were settled at rates between 7.50 per cent and 8.0 per cent, market operators said.
They, however, said the lender banks easily lend their funds on the inter-bank Repo market by charging interest rates between 8.00 and 8.50 per cent.
The SoCB official also said some lender banks are also investing their funds in cash-hungry banks and non-banking financial institutions (NBFIs) in the form of inter-bank placement, generally known as FDR (fixed deposit receipt), for mostly one month and three months' maturity to receive higher interests than that from call money.
BBN/SSR/AD-29Mar15-9:13 am (BST)