Economic Reporter :
With the average interest rate against bank lending coming down to single-digit, economists, bankers and businesspeople are optimistic about a surge in private sector investment that will help take the country’s economic growth to a sustainable level.
According to Bangladesh Bank data, average lending rate of all banks stood at 9.93 per cent in December 2016 against 11.18 per cent one year ago while weighted average deposit rates of all banks came down to 5.22 per cent in December 2016 from 6.34 per cent a year ago.
“Most of the banks are now offering credit to their clients at single digit interest rate as BB is continuing ethical pressure to banks to bring down the lending rate in single digit,” said BB’s economic adviser Dr Md Akhtaruzzaman.
He said BB has taken different initiatives in its Monetary Policy Statement (MPS) to bring down the lending rate in line with the expectation of the business community.
He also said the private credit growth, a major pulse of economic activities, grew by 15.55 percent in December 2016. The downward trend of lending rate is likely to expedite the private sector credit growth further, he added.
Additional Managing Director and COO of Mutual Trust Bank M Hashem Chowdhury also echoed the hope saying that MTB has already been offering credit to their good clients at 9 per cent interest.
“BB is playing a vital role through MPS, money market and call money market to reduce the lending rate. The interest rate would come down further if we can free the banking sector from Non Performing Loan (NPL),” he said.
As the big borrowers such as garments and textile sectors are rate ‘sensitive’, Southeast Bank Limited (SEBL) is offering 9 per cent lending rate for the industrial clients, said Senior Vice President of SEBL Abdul Quaium Chowdhury.
Executive Director of Centre for Policy Dialogue (CPD) Mustafizur Rahman said the downtrend of lending rate would further speed up investment as lending rate is one of the major expenses of investment.
He also underscored the need for ensuring gas, electricity and other basic needs to expedite private sector investment.
With the average interest rate against bank lending coming down to single-digit, economists, bankers and businesspeople are optimistic about a surge in private sector investment that will help take the country’s economic growth to a sustainable level.
According to Bangladesh Bank data, average lending rate of all banks stood at 9.93 per cent in December 2016 against 11.18 per cent one year ago while weighted average deposit rates of all banks came down to 5.22 per cent in December 2016 from 6.34 per cent a year ago.
“Most of the banks are now offering credit to their clients at single digit interest rate as BB is continuing ethical pressure to banks to bring down the lending rate in single digit,” said BB’s economic adviser Dr Md Akhtaruzzaman.
He said BB has taken different initiatives in its Monetary Policy Statement (MPS) to bring down the lending rate in line with the expectation of the business community.
He also said the private credit growth, a major pulse of economic activities, grew by 15.55 percent in December 2016. The downward trend of lending rate is likely to expedite the private sector credit growth further, he added.
Additional Managing Director and COO of Mutual Trust Bank M Hashem Chowdhury also echoed the hope saying that MTB has already been offering credit to their good clients at 9 per cent interest.
“BB is playing a vital role through MPS, money market and call money market to reduce the lending rate. The interest rate would come down further if we can free the banking sector from Non Performing Loan (NPL),” he said.
As the big borrowers such as garments and textile sectors are rate ‘sensitive’, Southeast Bank Limited (SEBL) is offering 9 per cent lending rate for the industrial clients, said Senior Vice President of SEBL Abdul Quaium Chowdhury.
Executive Director of Centre for Policy Dialogue (CPD) Mustafizur Rahman said the downtrend of lending rate would further speed up investment as lending rate is one of the major expenses of investment.
He also underscored the need for ensuring gas, electricity and other basic needs to expedite private sector investment.
