Dhaka, Bangladesh (BBN)– Bank interest rates on both lending and deposit remained almost stable in August following a uniform policy on deposit rate, introduced by two professional bodies earlier.
“The existing trend about interest rate is good for the banking sector. It may facilitate investment, particularly in the productive sectors in the near future,” a senior official of the Bangladesh Bank (BB) said, adding that the liquidity position in the banking sector has been improving gradually which will also help boost investment in different sectors in the coming months.
At least four commercial banks increased their lending rates in August last while only two banks, particularly foreign commercial banks, raised their deposit rates aiming to slash their cost of funds.
Deposit rate remained unchanged at maximum 12.78 per cent on fixed deposits in August last while the interest rate on other savings accounts ranges between 1.00 per cent and 12.00 per cent, according to the central bank statistics.
“The interest rate stability came in August last as a result of capping deposit rate at maximum 12.00 per cent in June this year,” a senior private banker said, adding that the banks particularly PCBs have been offering the deposit rate at a maximum of 12.00 percent from June 20 this year in line with their association’s decisions.
In June 2011, two professional bodies connected with local banks — Bangladesh Association of Banks (BAB) and Association of Bankers, Bangladesh (ABB) decided to follow a uniform policy on deposit rate.
The two associations have asked the private banks to cap deposit rate at 12 per cent — a move aimed at curbing a rate race among some banks to collect fresh funds in a bid to ease their liquidity pressure.
Currently, the banks provide loans to large and medium-scale industrial plants at lending rates ranging between 11.00 percent and 13.00 percent and to small industries, between 10.50 percent and 18.00 percent.
Lending rates on housing loans now range between 10.00 percent and 18.00 percent and consumer credits, between 13.00 percent and 22.00 percent.
BBN/SSR/AD-04Sept11-1:32 am (BST)
