Banks to offer single-digit interest rate soon: Muhith

MoU signed to give low-cost home loan to govt staff

FE Report | Published: September 26, 2018 10:45:04 | Updated: October 02, 2018 15:00:06

Top officials of Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank and the Bangladesh House Building Finance Corporation posing with Finance Minister AMA Muhith at the signing ceremony of a memorandum of understanding on home loans with the finance ministry at the conference room of the ministry in the city on Tuesday — PID photo

Finance Minister A M A Muhith has expressed the hope that the private commercial banks (PCBs) will bring down their lending rate to single digit shortly.

"I expect the banks will bring it down. So far many of them couldn't, but over a period of time they will do it," the minister told newsmen after a programme on Tuesday at his Bangladesh Secretariat office.

Both the public and private sector banks were supposed to bring down their loan interest rates to single digit by August 9.

The state-owned commercial banks (SoCBs) have already implemented the decision, but only a few PCBs have done it.

Mr Muhith said the bringing down of interest rate to single digit is just a simple matter, if the banks want to make less profit.

At the programme, heads of four SoCBs - Sonali, Janata, Agrani and Rupali - and Bangladesh House Building Finance Corporation (BHBFC) signed memorandum of understandings (MoUs) with Ministry of Finance to provide low-cost home loans to the government employees.

Additional Secretary of Finance Division Dr Md Jafar Uddin signed the deal on behalf of the ministry.

Under the deal, the four banks and BHBFC will provide the government employees house loan at 5.0 per cent rate of interest. The government will pay the financial institutions the rest as interest subsidy based on market rate.

Mr Muhith in his speech further said Bangladesh is lagging behind in providing housing facility to its citizens, although the country has attained success in ensuring other basic rights.

But now the government is paying due attention on how housing can be ensured for all, but it will take time, he noted.

He also said now around 60 per cent people have housing arrangement, while the rest stay in shanties.

The minister further said when he lands in Dhaka by aeroplane, he notices a silvery view, which means all the houses are made of corrugated iron sheets.

"It makes me understand that the development we achieved has spread across the country, not limited in the cities only."

Mr Muhith opined that the move to provide house loan for all the government employees is a democratic and inclusive step.

Elaborating the measure he said not only the upper-level officials will get the low-cost loan, but all the government employees will also participate in this initiative.

Officials of the ministries, which have already come under automation, will get the loan first. All of the government staff are likely to avail the low-cost loan by next two years.

They will get home loan between Tk 2.0 million and Tk 7.5 million, and repay the money in 20 years.

In the first year, Tk 3.0 billion to Tk 4.0 billion will be needed to provide loan to the govt employees.

Officials said if the government pays Tk 9.0 billion as subsidy, some 200,000 employees will be able to get the subsidised loan each year.

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