BRPD Circular Letter No. 75: Rationalization of Interest Rate on Deposit

Bangladesh Bank Chief Controller's Office Motijheel, Dhaka-1000 Bangladesh Ref No.: BRPD-Circular-75 Banking Regulation and Policy Department December 12, 2023 BRPD Circular Letter No. 75 Date: ------------------- 27 Agrahayan 1430 Managing Director/Chief Executive Officer All Scheduled Banks Operating in Bangladesh Dear Sir, Regarding the rationalization of interest/profit rates on deposits

1. We draw your attention to BRPD Circular No. 17 dated August 8, 2021, regarding the subject cited above.

2. Through the aforementioned circular, you were instructed that to protect the interests of depositors and prevent asset-liability imbalance in the banking sector, the interest/profit rate on any amount of time deposits held for personal customers with a tenure of three months or more, and for various funds established to pay provident funds, retirement benefits, and other dues of officers/managers of various government/private institutions, shall not be determined to be less than the inflation rate under any circumstances. However, given the recent introduction of market-based lending interest rate systems by banks, there is no necessity for the lower limit of deposit interest rates specified in the aforementioned circular.

3. In light of the above context, BRPD Circular No. 17 dated August 8, 2021, is hereby repealed to allow banks to determine the interest rates on collected deposits at their own discretion.

4. These instructions are issued under the powers conferred by Section 45 of the Companies Act, 1991.

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