BRPD Circular Letter No. 16: Interest/Profit of Loan/Investment

Bangladesh Bank
Chief Executive Office
Motijheel, Dhaka-1000
Bangladesh.
Ref No.: BRPD/Policy-11
Banking Regulation and Policy Department
31 March 2024
BRPD Circular Letter No. 16 Date: --------------- 17 Chaitra 1430 Managing Director/Chief Executive Officer All Scheduled Banks Operating in Bangladesh Dear Sir, Regarding Interest/Profit Rate of Loan/Investment Reference is drawn to your attention to BRPD Circular No. 09 dated 19 June 2023, BRPD Circular Letter No. 27 dated 27 July 2023, and BRPD Circular Letter No. 11 dated 29 February 2024 on the subject cited above.

2. Through BRPD Circular Letter No. 11/2024 cited above, you were instructed to determine the loan interest rate by adding a maximum margin of 3.5% to the Bangladesh Bank Policy Rate (BBPR). Additionally, you were instructed to determine the interest rate for pre-shipment export loans and agriculture/fisheries loans by adding a maximum margin of 2.5% to the BBPR.

3. In order to bring the loan interest rate more in line with monetary policy and to maintain economic momentum, the following instructions shall henceforth be complied with:
   a) In determining the loan interest rate, the interest rate shall be determined by adding a maximum margin of 3.0% to the BBPR; and b) In determining the interest rate for pre-shipment export loans and agriculture and fisheries loans, the interest rate shall be determined by adding a maximum margin of 2.0% to the BBPR.

4. The margins of the interest rates mentioned in paragraphs 3(a) and 3(b) shall apply to newly distributed loans from the date of issuance of these instructions. In the case of changing the interest rate of previously distributed loans, the instructions of paragraph 5 of BRPD Circular No. 09/2023 shall be complied with.

5. Through the issuance of these instructions, the instructions of BRPD Circular Letter No. 11/2024 are hereby revoked. Furthermore, other instructions mentioned in BRPD Circular No. 09/2023 and BRPD Circular Letter No. 27/2023 shall remain unchanged.

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

7. These instructions shall come into effect from 01 April 2024.

Yours faithfully,
(Mohammad Shahriar Siddique)
Director (BRPD)
Phone: 9530252