Dhaka, Bangladesh (BBN) – The inter-bank call money rate has increased gradually as funds from the private commercial banks (PCBs) have been concentrated with state-owned commercial banks (SCBs).

Three of the four SCBs have emerged the key players in the inter-bank money market holding a lion’s share of the funds in the country’s banking sector, market operators said.

Most of the PCBs have deposited their excess loan-able funds with the SCBs using their short-term deposit (STD) accounts for getting higher interest rates than that in the inter-bank call money market.

Currently, the three SCBs – Sonali, Janata and Agrani – are offering interest rates on STD ranging between 3.0 per cent and 5.0 per cent to the depositor banks.

“We’ve been encouraged to deposit our funds with the SCBs to receive the higher interest rates than the call money rates,” a senior treasury official of a PCB told BBN in Dhaka, adding that the SCBs along with few other commercial banks are now dominating the money market.

“Most of the funds have been concentrated with the three SCBs, because the call money rate declined day by day to the lowest level of 0.10 per cent,” the treasury official added.

The call rate mainly ranged between 3.00 per cent and 10 per cent Wednesday against Tuesday’s range between 2.50 per cent and 10 per cent. But most of the deals were made at rates between 4.00 per cent and 5.00 per cent, the market operators added.

“We’re fixing our call money rate in line with the market demand,” Managing Director and Chief Executive Officer of the Agrani Bank Limited Syed Abu Naser Bukhtear Ahmed told BBN in the capital, Dhaka on Wednesday.

He, however, said the call money rate is moving gradually up due to the increase in demand for loan-able funds in the banking sector.

On the other hand, the central bank will withdraw BDT 46.25 billion from the banking sector using different monetary tools like treasury bills and bonds this month. A total of BDT 31 billion was withdrawn in March last.

“The higher withdrawal may push the call money rate up in near future,” the treasury official noted.

BBN/SS/SI/AD-21May09-9:04 am (BST)