Dhaka, Bangladesh (BBN) - The central bank of Bangladesh has relaxed its rules allowing financial institutions to collect fixed deposit from individuals for six months instead of 12 months.
"We've relaxed the rules considering a proposal, submitted by the non-banking financial institutions (NBFIs) earlier," a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
He also said the NBFIs should launch innovative products to boost business activities through attracting more clients.
Under the amended rules, the NBFIs will be able to collect deposit from individuals for six month, which will not be allowed premature encashment.
The central bank issued a circular in this connection on Tuesday and asked the chief executives and managing directors of NBFIs to follow the amended rules for collection of deposit from individuals.
The Bangladesh Leasing and Finance Companies Association (BLFCA) welcomed the BB's latest move saying that it would help improve liquidity position of the NBFIs.
"The cost of fund will also come down following the relaxation of rules as part of the benefit can be passed on to the clients," BLFCA chairman Mafizuddin Sarker said, adding that the NBFIs are now able to collect deposits from both individuals and institutions for a period of six months.
The BLFCA earlier recommend to the central bank to ease conditionality for collection of fresh funds from individuals to meet the growing demand of their funds.
On February 16 last, the central bank assured the NBFIs of examining the proposal on taking fixed deposits from individuals for six months instead of 12 months.
Currently, 29 NBFIs are running their business across the country.
BBN/SS/SI/AD-10March10-9:21 am (BST)