Staff Reporter :
Bangladesh Bank has finally set a single-digit lending rate on loans in line with the directive of Prime Minister Sheikh Hasina.
The central bank issued a circular on Monday setting lending rates maximum 9 percent for all sectors except credit cards with effect from April 1.
The lending cap will be imposed on all non-classified loans except credit card, said the circular adding that banks can charge maximum 2 percent additional as penalty for loans that will turn non-performing after the new rates take effect.
“They will not be allowed to levy any other fees or charges other than the interest and the penalty,” it added.
The central bank, however, kept the 7 percent lending rate for export financing unchanged.
The business community has long been calling to bring down lending rates to single digit saying a persistent high interest rates on lending put a barrier on private sector investment retarding the industrial growth.
Prime Minister, too, has called on banks to slash lending rates on many occasions to single digit in her effort to boost private sector investment and economic growth.
On December 12, the seven-member committee, headed by BB Deputy Governor SM Moniruzzaman, on ‘Single-digit Lending and Deposit Rates Implementation’ submitted its report to Bangladesh Bank Governor Fazle Kabir, strongly recommending a single digit interest rate for industrial lending.
Besides industrial lending, the committee also recommended lowering the interest rates to single digits for cottage, micro, small and medium industrial (manufacturing) sectors, readymade garment, textile, ship-building, ship-breaking and agro-based industries.
