Dhaka, Bangladesh (BBN)- Most commercial banks are still charging higher commissions and fees for their services, thus pushing up the cost of doing businesses in the country.
Bank service charges and commissions vary from client to client, a trade body leader said, adding that banks normally take less charges and commissions from high profile clients but they realized inflated charges and commissions from small and medium clients.
The central bank is now reviewing the latest position of service charges and commissions following allegation made by different trade bodies to the Bangladesh Bank (BB) governor recently, officials said.
Different trade bodies including the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), Bangladesh Garment Manufactures and Exporters Association (BGMEA) and Bangladesh Knitwear Manufactures and Exporters Association (BKMEA) have requested the central bank governor for taking necessary measures to bring down the banks' commissions and service charges to a reasonable level.
"We're now working on the issue to bring down the rates of commissions and service charges at a reasonable level," Senior Deputy Governor of the BB Nazrul Huda told BBN in Dhaka.
He also said the central bank earlier issued a guideline on the fixation of commissions and charges for some specific services provided by the commercial banks to their clients.
"We've issued the guideline on the basis of recommendations from a high-powered committee," Mr. Huda said, adding that the central bank thinks that there is more scope to rationalize the rates of commissions and charges.
Besides, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the country's apex trade body, has already submitted a proposal to the authorities concerned requesting to rationalize bank charges.
The banks charge from their clients between BDT 1200 and BDT 3000 for courier charge under export bill negotiation while they charge between BDT 1200 and BDT 2400 for letter of credit (LC) amendment, according to the FBCCI study report.
The FBCCI has prepared the report on the basis of data collected from 11 commercial banks which was submitted to authorities concerned for taking necessary action.
Some banks take BDT 500 as LC advising charge while some other banks take BDT 250 for the same service. For LC transfer, some banks charge BDT 750 while others charge from BDT 300 to BDT 500, according to the FBCCI report.
"The commissions and service charges should be rationalized," FBCCI Presided Annisul Huq said, adding that the FBCCI has already mentioned what should be the reasonable charges and commissions in the proposal.
BGMEA President Abdus Salam Murshedy has proposed the central bank to introduce a uniform system to rationalize the bank charges and commissions.
"We've requested the BB governor for taking necessary measures to bring down the rates of charges and commissions to reasonable level from the existing level," Mr. Murshedy said.
He also raised allegation that some banks are yet to implement the BB's instruction relating to the fixation of the interest ceiling on lending in five areas to help mitigate the impact of global meltdown on the economy.
"The central bank must look into the matter to facilitate the country's key five areas of the economy," he said.
On April 19 last, the central bank asked the commercial banks to fix the interest ceiling on lending in five specific areas at a maximum 13 per cent to help mitigate the impact of the ongoing global economic meltdown.
The five areas are agriculture, term loan to large and medium-scale industries, working capital to large and medium-scale industries, housing, and trade financing.
"The commissions and service charges are extremely high in Bangladesh in the region that hamper the country's competitiveness in the external sector," BKMEA President Fazlul Hoque told BBN in Dhaka.
BBN/SSR/SI/AD-26June09-1:55 am (BST)