Bangladesh Bank (BB) has set maximum nine percent interest rate on all loans except credit cards as part of the government initiative to bring down the lending rate to a single digit, reports BSS.
The central bank has instructed the banks to implement the new interest rate from April 1 this year, according to a BB circular issued on Sunday night. Borrowers will have to pay an additional 2.0 percent as panel interest along with the new rate if they become defaulters despite getting the facility, the circular added.
The central bank has kept unchanged the interest rate at 7.0 percent for exporters. From the current year, the circular also said, banks will not be allowed to disburse loans to the industrial sectors less than their average outstanding credit in the last three years. The ongoing high bank interest rates are hindering the growth of the country’s small, medium and large business, and services sector, said the BB circular, adding ‘Such high lending rates are not only pushing their cost of production but also affecting the country’s competitive advantage in the global market.’
As a result, the businesses, sometimes, are unable to repay their bank loan on time which affects the discipline of the bank loans and hampers the country’s overall economic development, the BB circular added.