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57 banks charging double digit interest rates

  • Published at 01:13 am March 25th, 2018
57 banks charging double digit interest rates
All 57 commercial banks in the country are charging double digit interest rates on loans from businesses, Bangladesh Bank (BB) says. Some banks are charging more than 15% interest rates on industrial loans, the central bank said in a report published in February. According to the report, business persons have to pay double digit interest on both short and long term loans. Both state-owned and private banks have simultaneously hiked the interest on loans to double digits. Prime Minister Sheikh Hasina, during a recent meeting of the ruling Awami League, called on banks to bring down interest rates to single digit in the interest of the country’s development instead of making profit. Exporters Association of Bangladesh (EAB) President and Premier Bank Director Abdus Salam Murshedy agreed with the prime minister. “Interest rate should be lowered to single digit. Otherwise it will be difficult to make profit in business. Due to high interest rate, the production cost is increasing. It also impedes investment,” he said. Murshedy said it is possible to reduce the rate to single digit if the bankruptcy tendency is curbed. Banks already charged double digit interest rate on long-term loans but now they charge it on short-term loans also. The BB report said of the eight state-owned banks, Janata Bank Limited, Basic Bank Limited, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank are currently charging 13% interest rates on both short- and long-term loans. Businesses have to pay high interest on term, current and SME loans too. Sonali Bank Limited and Rupali Bank Limited are charging 11% interest rates while Agrani Bank Limited and Bangladesh Development Bank Limited are charging 11-12% interest on loans. The report also said private banks charge more interest than state-owned banks on industrial loans. Some banks are charging over 20% interest. Business persons who have taken loans from Brac Bank have to pay 22% interest. Other private banks are charging 15-18% interest from SME or small and medium range businesses. Big investors have to pay a maximum of 16-17% interest on both small and long term loans. Bangladesh Bank Governor Fazle Kabir voiced concern over the issue and urged state-owned banks not to raise interest on loans. “This is a negative sign for business and the country as well,” he said at a program organized by a state-owned bank recently.   This article was first published on banglatribune.com