Regulatory Alerts2012-02-29
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BRPD Circular Letter No. 02: Rate of Interest/Profit on Fixed/Term Deposit
The Banking Policy and Regulation Department of Bangladesh Bank instructs all scheduled banks to strictly adhere to the prohibition of charging interest outside declared rates and prohibits paying interest on fixed or term deposits exceeding the declared rate. Banks are required to submit a weekly signed list of fixed or term deposits issued or renewed with amounts of 1 crore Taka or more, including details such as account number, deposit amount, tenure, declared rate, and paid rate. Additionally, banks are restricted to changing deposit and loan interest rates only once per month, superseding previous instructions that allowed multiple changes. These directives are effective immediately.
BRPD Circular Letter No. 02 Banking Policy and Regulation Department Bangladesh Bank Head Office Dhaka. February 29, 2012 BRPD Circular Letter No. 02 Date: ------------------- Falgun 17, 1418
To, Managing Director/Chief Executive Officer All Scheduled Banks operating in Bangladesh.
Dear Sir,
Context regarding the rate of interest/profit on fixed/term deposits.
Through BRPD Circular Letter No. 01, dated January 04, 2011, banks were instructed to strictly follow the directives of Bangladesh Bank regarding the prohibition of charging interest on deposits and loans outside the declared interest rates. However, it has recently been observed that some banks are paying interest/profit at rates higher than the declared interest/profit rate on fixed/term deposits.
In this regard, you are hereby instructed to send the following table to this department on a weekly basis, listing the fixed/term deposits of 1 crore Taka and above issued/renewed by your bank:
| Serial No. | Account No. | Deposit Amount | Tenure | Declared Interest/Profit Rate | Paid Interest/Profit Rate |
|---|
The information regarding fixed/term deposits issued/renewed up to the last working day of the previous week must be sent by the third working day of the following week. The aforementioned list must be signed by the Managing Director/Chief Executive Officer.
Furthermore, through BRPD Circular Letter No. 04, dated April 19, 2009, instructions were provided that the interest rates on deposits and loans could be changed more than once a month instead of once a month. It is now decided that banks may change the interest/profit rates on deposits and loans only once per month.
These instructions shall come into force immediately.
Thanking you,
Yours faithfully,
(Md. Anowarul Islam) Deputy General Manager Phone: 7120377
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