BRPD Circular Letter No. 11: Interest/Profit Rate of Loan/Investment

Bangladesh Bank Chief Executive Office Motijheel, Dhaka-1000 Bangladesh. Ref No.: BRPD/Policy/2023-24/11 Banking Regulation and Policy Department 29 February 2024 BRPD Circular Letter No. 11 Date: ------------------- 16 Falgun 1430 Managing Director/Chief Executive Officer All Scheduled Banks operating in Bangladesh Dear Sir,

Regarding the Interest/Profit Rate of Loan/Investment

Reference is drawn to your attention to BRPD Circular No. 09/2023, BRPD Circular Letter No. 27/2023, and BRPD Circular Letter No. 64/2023 on the subject cited above.

2. In light of the decisions taken by the Monetary Policy Committee to reduce inflation, the impact of the policy rate increase has already been reflected on BRPD. In this context, to ensure alignment of loan interest rates with monetary policy and to maintain economic momentum, the following instructions shall be complied with in determining loan interest rates:

a) In determining loan interest rates, the interest rate shall be determined by adding a maximum margin of 3.50% to BRPD; and

b) In determining the interest rates for pre-shipment export loans and agriculture and fisheries loans, the interest rate shall be determined by adding a maximum margin of 2.50% to BRPD.

3. The margins of interest rates specified in paragraphs 2(a) and 2(b) shall apply to loans newly distributed after the issuance of these instructions. In the case of changes to the interest rates of previously distributed loans, the instructions in paragraph 5 of BRPD Circular No. 09/2023 shall be complied with.

4. With the issuance of these instructions, the instructions of BRPD Circular Letter No. 64/2023 are hereby revoked. In addition, other instructions mentioned in BRPD Circular No. 09/2023 and BRPD Circular Letter No. 27/2023 shall remain unchanged.

5. These instructions are issued under the powers conferred by Section 29(2)(c) of the Bank Company Act, 1991.

6. These instructions shall come into effect from March 1, 2024.

Yours faithfully,

(Mohammad Shahriar Siddique) Director (BRPD) Phone: 9530252