Dhaka, Bangladesh (BBN) – The central bank of Bangladesh is going to take a hard-line against the commercial banks that are violating of self declared interest rates on deposit, officials said.
“We’re monitoring interest rates on both deposit and lending closely to ensure discipline in the country’s financial sector,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told BBN, adding that the BB will take action against non-compliant banks under the existing Bank Company Act.
As part of the move, the commercial banks are now allowed to announce their interest rates only once in a month instead of several times previously.
The central bank issued a circular in this connection on Wednesday and asked the managing directors and chief executive officers of all scheduled banks to abide by the latest instructions relating to the announcement of interest rates.
“It will help monitor the overall interest rates situation strictly,” another central banker said, adding that the banks will have to comply with announced interest rates properly.
The BB earlier asked the commercial banks not to pay higher interest rates than the ones announced by them.
The commercial banks have been asked to report on receipt or renewal of deposited amount involving BDT 10 million and above in a prescribed form to the Banking Regulation and Policy Department (BRPD) of the BB on weekly basis.
The report will be submitted to the BRPD within third working day of the next week covering the latest information on such deposit till the last working day of the previous week, according to the BB officials.
The central bank has taken the latest measures against the backdrop of violation of declared interest rates on deposit by some commercial banks recently.
The central bank of Bangladesh has already issued show-cause notices on three state-run banks for their alleged violation of declared interest rates on term and fixed deposits.
The BB’s inspection teams are now investigating into allegations of offering higher interest rates on deposits contrary to announcement by different commercials banks.
BBN/SSR/AD-29Feb12-9:28 pm (BST)
