Industrial sector to get single-digit lending rate, loan defaulters barred

The Bangladesh Bank (BB)-formed committee submitted its report to the governor on Thursday, and recommended that only industrial manufacturing sectors will be eligible for availing single-digit lending rate.

The seven-member committee, headed by the BB Deputy Governor S M Moniruzzaman, was formed on December 01 to find out ways for bringing down the industrial lending rate to single-digit. It was asked to submit the report within seven working days.

"The governor will take the next course of actions for implementation of the recommendations of the report," Mr Moniruzzaman told the FE after submitting the report to the BB governor on Thursday night.

Loan defaulters will not be entitled to get the single-digit interest rate benefit, according to a committee member.

"Only unclassified and regular borrowers will be eligible for availing the benefit," he told the FE.

According to the committee's recommendations, the interest rates of large industrial (manufacturing) loans along with cottage, micro, small and medium industrial (manufacturing) loans will be lowered to single-digit from the existing level.

Besides, large industrial (manufacturing) loans will include credit provided to the ready-made garment (RMG), textile, ship-building and ship-breaking, agro-based industry and similar other sectors.

The borrowers of such industrial manufacturing sectors will get loans at 9.0 per cent interest rate instead of the existing level of around 12.00 per cent interest rate.

"Trading and service sectors will not be entitled to get the low interest rate on loans," he added.

The committee finalised its recommendations highlighting creating employment opportunities across the country through boosting industrial manufacturing sectors.

"We've recommended bringing down the loan interest rate of the industrial manufacturing sectors to single-digit, which will contribute directly to achieving higher economic growth," he added.

Other members of the committee are - Kazi Akram Uddin Ahmed, chairman of Standard Bank Limited, Zaid Bakht, chairman of Agrani Bank Limited, Syed Mahbubur Rahman, managing director (MD) and chief executive officer (CEO) of Mutual Trust Bank Limited, Md Obayed Ullah Al Masud, MD and CEO of Rupali Bank Limited, Shah A Sarwar, MD and CEO of IFIC Bank Limited, and Mehmood Husain, MD and CEO of NRB Bank Limited.

After a meeting with the chairmen and MDs of public and private sector banks on December 01, Finance Minister A H M Mustafa Kamal told the reporters that the single-digit interest rate on industrial lending will come into effect from January 01, 2020.

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