The issue will be taken up to the highest level of the government, said FBCCI President Shafiul Islam
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has urged the banks to implement their decision to bring down the interest rates to single digits without delay “for the sake of employment and investment” in the country.
The Bangladesh Association of Banks (BAB), on June 20, decided to reduce the interest rate on lending to 9% and on deposits to 6%. The new rates were supposed to be effective from July 1.
In a statement, the BAB said it had taken the decision following the directive of Prime Minister Sheikh Hasina “to create an industry-friendly environment [which supports] new entrepreneurs, generates employment, and accelerates trade.”
FBCCI President Shafiul Islam told a press briefing, at the FBCCI Bhaban on Monday, that only the Islami Bank was implementing the new rate.
He said reducing the lending rate was a timely step which would encourage Bangladeshi businessmen to invest more and help to create new entrepreneurs.
“We would like to see the central bank’s strict supervision of this issue,” he said. “If the interest rates are not brought down to a single digit, we will take it [this recommendation] up to the highest level of the government.”
Shafiul noted that the average interest on bank debt is: 4.3% in China 5.3% in Singapore, 6.25% in Vietnam, 8.2% in Pakistan, 7% in Thailand and Nepal, 4.5% in Indonesia, and 4.8% in Malaysia.
“Reducing the [interest] rate will cut business costs and help to survive competition with neighbouring countries,” he said.
The FBCCI chief noted that the default loan, which stood at Tk88,589 crore, must also be reduced.
“The government is working on creating an independent bank commission. We hope it will be set up soon,” he added.