Dhaka, Bangladesh (BBN)- The overall growth in credits from the country’s banking system took an upturn, as of the last week of July, as banks lowered a little their interest rates on lending particularly for corporate clients, bankers said.
As of July 24 last, the overall credit growth rose to 11.74 per cent from 10.15 per cent that was on June 30, 2014 while growth in bank deposits stood at 16.13 per cent from 15.81 per cent, according to the central bank statistics.
Most of the banks are now offering lower lending rates to the well-performing corporate entities for expediting their overall business activities, a senior official of a leading private commercial bank (PCB) told BBN.
He also said the interest rates on credits only for the corporate entities came down to 10.50 per cent recently from 15 per cent early this calendar year.
“The rising trend in credit growth may continue in the coming months if the declining trend of interest rates on lending, particularly for corporate entities, continues,” the private banker observed.
The credit-deposit ratio (CDR) of all the banks came down to 70.42 per cent, as of July 24 last, from 70.45 per cent as of June 30, 2014 because of higher deposit growth than that of credits influenced the credit-deposit balance.
The central bank earlier set the safe limit of CDR at 85 per cent for conventional banks and at 90 per cent for Sharia-based Islamic banks.
BBN/SSR/AD-17Sept14-11:44 am (BST)