THE decision of lending at nine per cent interest rate would be implemented from August 9 The Finance Ministry has taken tough stance as most of the banks did not execute the decision by the July 1 deadline. Finance Minister AMA Muhith on Thursday reconfirms the date for executing the bank loan at the single-digit rate, a most hyped step for boosting small and medium enterprises. Moreover, savings at six per cent interest rate would also be implemented from the same date after a meeting with the bankers of private banks and state-owned banks. The consumers’ loans and credit cards, however, would not come under the purview of the proposed new interest regime.
News media reported that the fresh deadline has been announced after most of the banks failed to bring down the interest rates to the single digit by the July 1 deadline, set on the basis of a meeting on June 20 between the Finance Minister and the Bangladesh Association of Banks. Bank operators noted that ballooning classified loan, which has already hit the profit of the banks, could be a major impediment to successful implementation of the long-standing demand by the investors to bring down the interest rate below the double-digit.
The Minister said the government would review the interest rate of the state-run savings certificate, another long-standing demand by the banks’ owners. The net sales of savings certificates stood at Tk 46,758 crore against the annual upward revised target of Tk 44,000 crore in the just concluded fiscal year (2017-18) as buying spree of savings certificates continued for the last several years amid shrinking benefits in other savings instruments.
The slashing interest rates could trigger more liquidity crisis, which in turn could jeopardize the plan to reduce the lending rate. Experts said there’s no harm if the loan money plays a role in the national economy but as lack of good governance in the banking sector the initiatives could deepen the crisis.
The government should think twice before forcefully implementing the single digit policy as the banking sector is almost on the verge of collapse due to big loan scams and swindling of money.
News media reported that the fresh deadline has been announced after most of the banks failed to bring down the interest rates to the single digit by the July 1 deadline, set on the basis of a meeting on June 20 between the Finance Minister and the Bangladesh Association of Banks. Bank operators noted that ballooning classified loan, which has already hit the profit of the banks, could be a major impediment to successful implementation of the long-standing demand by the investors to bring down the interest rate below the double-digit.
The Minister said the government would review the interest rate of the state-run savings certificate, another long-standing demand by the banks’ owners. The net sales of savings certificates stood at Tk 46,758 crore against the annual upward revised target of Tk 44,000 crore in the just concluded fiscal year (2017-18) as buying spree of savings certificates continued for the last several years amid shrinking benefits in other savings instruments.
The slashing interest rates could trigger more liquidity crisis, which in turn could jeopardize the plan to reduce the lending rate. Experts said there’s no harm if the loan money plays a role in the national economy but as lack of good governance in the banking sector the initiatives could deepen the crisis.
The government should think twice before forcefully implementing the single digit policy as the banking sector is almost on the verge of collapse due to big loan scams and swindling of money.
