• Tuesday, Oct 27, 2020
  • Last Update : 09:17 am

Single digit lending rate: Bankers seek assurance of 6% deposit first

  • Published at 10:22 pm January 14th, 2020
Loan Bigstock
Representation photo Bigstock

'We were waiting for the central bank’s circular that would issue to the banks on the single digit lending rate implementation'

The bankers on Tuesday demanded that the central bank should first ensure that banks got deposit at 6% rate before implementing the 9% lending rate.

They also demanded that the government funds should be made available to private commercial banks at 6% rate to expedite the implementation of single digit lending.

“We have informed the central bank about the challenges which banks might face when the lending at 9% interest would be implemented. First we need to ensure 6% deposit in the banks,” Association of Bankers, Bangladesh (ABB) Chairman and Eastern Bank managing director Ali Reza Iftekhar told reporters on Tuesday.

The ABB statement came after a meeting with the Bangladesh Bank Governor Fazle Kabir.

“As soon as deposits, especially the government agencies’ funds, are available, the banks would be able to implement the lending rate," Iftekhar said. 

"We have urged the central bank to keep lending rate of small and retail loans out of the single digit lending rate purview," the ABB chairman said. 

"We were waiting for the central bank’s circular that would issue to the banks on the single digit lending rate implementation," he said. 

The bankers at the meeting also reiterated the revision of loan write-off policy as it would help improving the condition of banks’ balance sheet, he said.

The Bangladesh Bank (BB), meanwhile, rejected the bankers’ proposal to keep the small and medium enterprises (SMEs) loans outside single digit lending rate.

BB spokesman and executive director Md Serajul Islam said: “But the central bank has rejected the recommendation because the decision would affect small industry development. A portion of banks' loans go to the SMEs sector,” he said. 

Md Serajul Islam said that BB instructed banks that not to withdraw a big portion of their deposits from the non-banking financial institutions (NBFIs) at a time as the sector was passing a critical moment due to liquidity crisis. 

Banks should be strict about mortgage or security against their disbursement of credit to prevent loan scams, he added.

blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail