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FBCCI: Bring down interest rates to single digits

  • Published at 10:09 pm February 20th, 2019
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FBCCI President Shafiul Islam Mohiuddin hands over a bouquet of flowers to Bangladesh Bank Governor Fazle Kabir, at the central bank headquarters, on February 20, 2019 Dhaka Tribune

A delegation of the chamber met with central bank governor Fazle Kabir on Wednesday to discuss the NPL crisis

A delegation of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) met with central bank governor Fazle Kabir yesterday at the Bangladesh Bank headquarters to urge lowering interest rates on lending to single digits.

Speaking to reporters after the meeting, FBCCI President Shafiul Islam Mohiuddin, said they discussed the need for more investments to achieve the government's vision and bringing down lending interest rates to single digits in order to resolve the NPL (non-performing loan) crisis. 

They also discussed easing access to finance for women entrepreneurs, special assistance for small and medium-sized enterprises (SMEs), rationalizing hidden charges in sanctioning loans, easing offshore banking procedures, and stabilizing good governance in the country's banking sector. 

The delegation further informed that the governor had termed the meeting as being "very fruitful."

Responding to a proposal of the FBCCI president, Fazle Kabir agreed to form a 'Working Group’ consisting of the central bank, the Finance Ministry, the Finance Division, and business leaders, to discuss various issues related to the banking sector.

Last year, the Bangladesh Association of Banks (BAB) decided to bring down interest rates on lending to 9% and the rate on deposits to 6% from existing levels. 

In a statement, the BAB said it took the decision upon the directions of Prime Minister Sheikh Hasina, to create an industry-friendly environment, encourage new entrepreneurs, generate employment, and accelerate trade.   

However, many of the banks failed to keep their promise. Currently, private banks are lending at between 14% and 15%, while the average interest rate for deposits is between 9% and 10%.