Regulatory Alerts2012-01-22
Added · Updated
Rationalization of Rate of Interest on Deposit and Lending
Banks are advised to limit the difference between their lending rate and the weighted average rate of interest on deposit, or intermediation spread, to a lower single-digit percentage in sectors other than high-risk consumer credit and SME loans. This directive follows the withdrawal of the cap on lending rates for sectors excluding pre-shipment export credit and agricultural loans. The instruction takes immediate effect.
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Banking Regulation & Policy Department Bangladesh Bank Head Office Dhaka-1000
January 22, 2012 BRPD Circular Letter No.-01 Date: --------------------- Magh 09, 1418
Chief Executives All Scheduled Banks in Bangladesh. Dear Sir, Rationalization of Rate of Interest on Deposit and Lending. Cap on rate of interest on lending in all sectors other than pre-shipment export credit and agricultural loans has recently been withdrawn vide BRPD Circular No.-02 dated January 04, 2012. Complaints from business community are being made that banks are not exercising their freedom while fixing rate of interest on lending in justified and rational manner. In this regard banks are advised to limit the difference between lending rate and weighted average rate of interest on deposit or intermediation spread within lower single digit in different sectors other than high risk consumer credit (including credit card) and SME loans. This instruction shall come into force with immediate effect. Please acknowledge receipt. Yours sincerely, sd/- (K.M. Abdul Wadood) General Manager Phone: 7117825
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