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Dhaka, Bangladesh (BBN)– The Bangladesh Bank (BB)’s committee has recommended that only industrial manufacturing sectors will be eligible for availing single-digit lending rate.

The high-powered committee submitted its report to BB Governor Fazle Kabir on Thursday with recommendations and proposals for minimizing possible adverse impact on the country’s banking sector after slashing interest rates on industrial loans at single-digit from the existing level.

The seven-member committee, headed by the BB Deputy Governor S M Moniruzzaman, was formed on December 01 to find out ways for bringing down the industrial lending rate to single-digit. It was asked to submit the report within seven working days.

“The governor will take the next course of actions for implementation of the recommendations of the report,” Mr Moniruzzaman told media after submitting the report to the BB governor on Thursday night.

Talking to the BBN, a committee member said loan defaulters will not be entitled to get the single-digit interest rate benefit. “Only unclassified and regular borrowers will be eligible for availing the benefit.

The interest rates of large industrial (manufacturing) loans along with cottage, micro, small and medium industrial (manufacturing) loans will be lowered to single-digit from the existing level, according to the committee’s recommendations.

Besides, large industrial (manufacturing) loans will include credit provided to the ready-made garment (RMG), textile, ship-building and ship-breaking, agro-based industry and similar other sectors.

The borrowers of such industrial manufacturing sectors will get loans at 9.0 per cent interest rate instead of the existing level of around 12.00 per cent interest rate, an official familiar with the committee said.

He also said trading and service sectors will not be entitled to get the low interest rate on loans.

The committee has finalised its recommendations highlighting creating employment opportunities across the country through boosting industrial manufacturing sectors.

“We’ve recommended bringing down the loan interest rate of the industrial manufacturing sectors to single-digit, which will contribute directly to achieving higher economic growth,” the committee member explained.

Other members of the committee are – Kazi Akram Uddin Ahmed, chairman of Standard Bank Limited, Zaid Bakht, chairman of Agrani Bank Limited, Syed Mahbubur Rahman, managing director (MD) and chief executive officer (CEO) of Mutual Trust Bank Limited, Md Obayed Ullah Al Masud, MD and CEO of Rupali Bank Limited, Shah A Sarwar, MD and CEO of IFIC Bank Limited, and Mehmood Husain, MD and CEO of NRB Bank Limited.

After a meeting with the chairmen and MDs of public and private sector banks on December 01, Finance Minister A H M Mustafa Kamal told the reporters that the single-digit interest rate on industrial lending will come into effect from January 01, 2020.