DFIM Circular No. 05: Regarding inadmissible expenses of financial institutions for mobilizing deposits

Department of Financial Institutions and Markets Bangladesh Bank Head Office Dhaka. Website: www.bb.org.bd DFIM Circular No. 05 Chief Executive/Managing Director All Financial Institutions operating in Bangladesh. Dear Sir, Regarding inadmissible expenses of financial institutions for mobilizing deposits. Recently, it has been observed that some financial institutions are incurring expenses under various heads/titles such as commission, development expenses, business development costs, etc., for the purpose of mobilizing deposits, which is unethical and inadmissible. Through the aforementioned activities, financial institutions are unreasonably increasing their fund expenditure, which is influencing the upward trend of interest/profit rates on loans/investments of these institutions. In the aforementioned context, it has been decided that financial institutions shall not incur any hidden expenses (commission, business development costs, development expenses, or by whatever name they may be called) for mobilizing deposits, other than their declared interest/profit rates. Furthermore, financial institutions shall regularly publish updated information regarding their interest/profit rates on their own websites. This directive is issued under the power conferred by Section 18(g) of the Financial Institutions Act, 1993, and shall be effective immediately. Yours faithfully, (Ranjit Kumar Roy) Deputy General Manager Phone: 9530249 Date: 28 Falgun 1428 13 March 2022