BSS, Dhaka :
The average lending rates in the banking sector came down to 11.93 percent at the end of March from 12.23 percent in February after Bangladesh Bank (BB) pushed banks to cut their lending rates.
With the drop in interest rates, the spread (difference between lending rate and deposit rate) also fell below 5.0 percent, the maximum spread, admissible by the central bank.
The central bank earlier directed all banks to maintain the spread at 5.0 percent so people can get reasonable returns on their deposits and the interest rates against loans remain rational. But, the subsequent monitoring by BB found out that banks cut the deposit rates, but did not reduce their lending rates accordingly.
It was also found that at least 13 banks were charging 14.0 percent interest on credit while five banks did not bring down their interest rate against agriculture loan to 11.0 percent as per the central bank’s earlier directive.
Terming this disparity between deposit and lending rates unexpected, BB Governor Dr Atiur Rahman last week asked all banks to reduce their landing rates in accordance with their interest rates on deposits so the spread comes near 4.0 percent.
Following the directives, many banks cut their lending rates, which brought the spread to 4.87 percent, according to a BB press release issued on Tuesday.
BB said that it had been constantly encouraging lending to productive sectors for expediting inclusive growth process, which would eventually contribute to socio-economic development of the country besides bringing in financial stability.
