Economic Reporter :
In view of the downward trend in the overall interest rate spread in country’s banking sector, the economists, bankers and businesspeople are optimistic about a surge in the investment which will help take the country’s economic growth to a sustainable level.
According to Bangladesh Bank (BB) data, interest-rate spread of all banks declined to 4.62 percent in July 2017 from 4.72 percent in the previous month and interest rate spread for consumer finance and credit card also fell to 4.53 percent from 4.62 percent.
“Interest rate spread is coming down to a desired level as BB is maintaining ethical pressure on banks to keep up good combination between weighted average interest rate on deposits and weighted average interest rate on advances,” said BB’s chief spokesperson Subankar Saha.
Talking to media, Saha said BB has instructed the banks to create good governance for making profit by keeping up the interest rate and deposit rate at the desired level.
BB has also asked the banks for taking initiatives so that the interest on deposits remains at a comfortable position.
Deputy Managing Director of Islami Bank Bangladesh Limited (IBBL) Abu Reza Mohd. Yeahia said IBBL has been offering credit to their good clients at 8.68 percent weighted average interest rate on advance against 4.16 percent weighted average interest rate on deposit.
“Lowering the interest rate spread is playing a vital role in increasing the flow of investment. The spread rate will encourage the youths to come forward to be an entrepreneur.
IBBL is cutting the interest rate spread by keeping up the interest of depositors,” he added.
The IBBL senior official said IBBL is trying to keep weighted average interest rate on deposit at a standard level to encourage the depositors.
“We always try to reduce administrative and other costs so that IBBL can maintain a tolerable interest rate spread to boost the country’s economy,” he added.
As the demand for loan is increasing day by day, Southeast Bank Limited (SEBL) is offering 8.57 per cent weighted average interest rate on advance, which has brought the interest rate spread to 3.78 percent, said SEBL Executive Vice President Abdul Baten Chowdhury.
World Bank Lead Economist in Dhaka Dr Zahid Hossain said the downtrend of interest rate spread is likely to speed up investment as lending rate is one of the major expenses of investment.
“But, we should develop infrastructures by ensuring gas, electricity, transport and other basic needs to expedite private sector investments,” he added.
President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) M Shafiul Islam Mohiuddin said interest rate spread is one of the components required for boosting investment so that lowering the interest rate is likely to have a positive impact on the private sector credit growth.
“We should also keep our attention on other components, including infrastructures, to enhance the flow of investments,” he added.
According to the BB data, the overall interest rate spread of the state-owned banks has come down to 4.11 per cent in July from 4.19 per cent in the previous month.
The overall interest rate spread of state-owned commercial banks – Agrani, Janata, Rupali, Sonali, BASIC and Bangladesh Development Bank – are 4.66 per cent, 4.96 per cent, 4.59 per cent, 4.24 per cent, 0.27 per cent and 1.39 per cent respectively.
The two specialised banks Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank have also slashed down their interest rate spread to 3.06 and 0.84 percent.
In view of the downward trend in the overall interest rate spread in country’s banking sector, the economists, bankers and businesspeople are optimistic about a surge in the investment which will help take the country’s economic growth to a sustainable level.
According to Bangladesh Bank (BB) data, interest-rate spread of all banks declined to 4.62 percent in July 2017 from 4.72 percent in the previous month and interest rate spread for consumer finance and credit card also fell to 4.53 percent from 4.62 percent.
“Interest rate spread is coming down to a desired level as BB is maintaining ethical pressure on banks to keep up good combination between weighted average interest rate on deposits and weighted average interest rate on advances,” said BB’s chief spokesperson Subankar Saha.
Talking to media, Saha said BB has instructed the banks to create good governance for making profit by keeping up the interest rate and deposit rate at the desired level.
BB has also asked the banks for taking initiatives so that the interest on deposits remains at a comfortable position.
Deputy Managing Director of Islami Bank Bangladesh Limited (IBBL) Abu Reza Mohd. Yeahia said IBBL has been offering credit to their good clients at 8.68 percent weighted average interest rate on advance against 4.16 percent weighted average interest rate on deposit.
“Lowering the interest rate spread is playing a vital role in increasing the flow of investment. The spread rate will encourage the youths to come forward to be an entrepreneur.
IBBL is cutting the interest rate spread by keeping up the interest of depositors,” he added.
The IBBL senior official said IBBL is trying to keep weighted average interest rate on deposit at a standard level to encourage the depositors.
“We always try to reduce administrative and other costs so that IBBL can maintain a tolerable interest rate spread to boost the country’s economy,” he added.
As the demand for loan is increasing day by day, Southeast Bank Limited (SEBL) is offering 8.57 per cent weighted average interest rate on advance, which has brought the interest rate spread to 3.78 percent, said SEBL Executive Vice President Abdul Baten Chowdhury.
World Bank Lead Economist in Dhaka Dr Zahid Hossain said the downtrend of interest rate spread is likely to speed up investment as lending rate is one of the major expenses of investment.
“But, we should develop infrastructures by ensuring gas, electricity, transport and other basic needs to expedite private sector investments,” he added.
President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) M Shafiul Islam Mohiuddin said interest rate spread is one of the components required for boosting investment so that lowering the interest rate is likely to have a positive impact on the private sector credit growth.
“We should also keep our attention on other components, including infrastructures, to enhance the flow of investments,” he added.
According to the BB data, the overall interest rate spread of the state-owned banks has come down to 4.11 per cent in July from 4.19 per cent in the previous month.
The overall interest rate spread of state-owned commercial banks – Agrani, Janata, Rupali, Sonali, BASIC and Bangladesh Development Bank – are 4.66 per cent, 4.96 per cent, 4.59 per cent, 4.24 per cent, 0.27 per cent and 1.39 per cent respectively.
The two specialised banks Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank have also slashed down their interest rate spread to 3.06 and 0.84 percent.
