BRPD-1 Circular Letter No. 22: Regarding the Intermediation Spread Between the Weighted Average Interest Rate of Advances and Deposits

Banking Regulation and Policy Department Main Branch Gazipur, Dhaka-1000 Bangladesh website: www.bb.org.bd Circular Letter No. 1 29 Rab 2026 Circular Letter No. 22: ------------------ 15 Aklal 1433 Regulations/Instructions for Banks All Scheduled Banks in Bangladesh Subject, Regarding the Intermediation Spread between the weighted average interest rate of advances and deposits

With reference to Circular Letter No. 67 dated 29 Bhadra 2023, it has been observed that the weighted average interest rate of advances and deposits, or the intermediation spread, calculated under the formula {SMART (Six Months Moving Average Rate of Treasury Bill) + Specified Margin} is not being reported accurately by all banks. Consequently, Circular Letter No. 10 dated 08 Magh 2024 was issued to instruct banks to report the intermediation spread accurately after the implementation of the standardized interest rate reporting format. It has been noted that many banks are reporting incorrect intermediation spreads due to errors in the calculation of the weighted average interest rate of deposits, which deviates from the standard guidelines.

Therefore, to ensure uniformity in the calculation of the weighted average interest rate of deposits, it has been decided that all banks must report the weighted average interest rate of advances and deposits, or the intermediation spread, not exceeding 4%.

This instruction is issued under Sections 29(2)(P) and 45 of the Bank Company Act, 1991.

This instruction is applicable to all banks.

Sincerely, (Mr. Md. Monjurul Islam) Deputy Governor (Circular Letter No. 1) Page 9530252