SoCBs to give funds to PCBs at 6.0pc interest
The state-owned commercial banks (SoCBs) have agreed to provide deposit to the private commercial banks (PCBs) at 6.0 per cent interest rate for implementing the single-digit lending rate, officials said.
The decision was disclosed at a meeting of the bankers, held at the Bangladesh Bank (BB) headquarters in Dhaka on Monday with BB Governor Fazle Kabir in the chair.
The government is thinking about depositing its fund with both the public and the private sector banks at rates below 6.0 per cent to help implement the proposed interest rate.
"We're now discussing the issue with the government," BB Deputy Governor Abu Hena Mohammad Razee Hassan told the reporters after the meeting.
He also said some banks have already implemented the proposed interest rate in line with the decisions of their board of directors.
"Other banks are on the way (to do so)," the BB deputy governor added.
Talking to the FE, Obayed Ullah Al Masud, chief executive officer and managing director of the Sonali Bank Limited, said: "Yes, we'll provide deposit to the PCBs at 6.0 per cent interest rate."
Meanwhile, the PCBs have started implementation of the proposed cut in their lending and deposit rates in line with the decisions of the Bangladesh Association of Banks (BAB).
On June 20, BAB decided to bring down the interest rates on lending and deposit to 9.0 per cent and 6.0 per cent respectively from July 01.
"We've already started implementation of the BAB-proposed interest rates," Syed Mahbubur Rahman, chairman of the Association of Bankers, Bangladesh (ABB), told reporters.
He also said the PCBs are reducing the lending rates to 9.0 per cent from the existing level in line with the decisions of their respective board of directors.
"The PCBs, particularly the conventional ones, will not change the interest rate on the deposits before their maturity," the ABB chief noted.
As per the BAB decisions, the proposed interest rate on deposit will be applicable in case of the deposits having three-month maturity tenure only.
The interest rates of other term-deposits (for six months and one year) will not come under such jurisdiction.
"We've also sought supports from the central bank for smooth implementation of the proposed interest rates," Mr. Rahman added.
At the meeting, BB assured the bankers to extend its support for implementing the single-digit lending rate, meeting sources said.
On June 25, the ABB leaders urged BB to ensure depositing funds from the government agencies to their banks at rates below 6.0 per cent for implementing the single-digit lending rate.
They also requested the central bank to intervene in the matter and ask the SoCBs for depositing their funds with the PCBs at 6.0 per cent interest rate.
The government has already allowed the state entities to deposit 50 per cent of their funds with the PCBs instead of the previous 25 per cent to meet their growing demand for liquidity.
The state-owned enterprises have already deposited funds amounting to around Tk 2.0 trillion with the banks, according to a BB senior official.