Dhaka, Bangladesh (BBN)– The central bank has warned of tough action against the banks who are offering additional interest to attract more deposits for offsetting their cash crunch.

Bangladesh Bank (BB) said in a directive on Tuesday that banks are not allowed to offer interests on deposits and advances, which are higher than their already announced rates of interest.

But, the directive said the central bank recently noticed that some banks were offering higher interest only to attract more deposits.

It asked the respective banks to stop such practice or face punitive actions.

BBN/SI/AD-05Jan11-9:58 am (BST)