Despite higher demand for cash support from non-bank financial institutions and private commercial banks, the call money rate dropped further to 7.69 per cent on Wednesday compared to 7.80 per cent, a week before and 7.91 per cent on April 30.
A total of 24 institutions borrowed Tk 2,519.00 crore at rates between 7.39 per cent and 8.00 per cent, central bank officials said noting that most non bank financial institutions are largely depended on the call money market to meet their cash shortages.
Normally banks charge higher rates on non-bank financial institutions for short term lending in comparison to their lending to banks. Following the falling call money rate, NBFIs see the money market as a safe-haven for them.
As the overnight money rate is falling, so, non-bank financial institutions are enjoying good time to manage their business. They borrow money from call market and lend the same to their clients at higher rates, said a central bank official.
The volume of transactions was also higher and recorded at Tk 5,261.00 crore on Tuesday compared to its previous day’s Tk 4,993.00 crore. A total of 29 private commercial banks were in need of cash funds and borrowed Tk 2,629.00 crore from call money market at rates between 6.25 per cent.
Agrani Bank, Rupali Bank, Janata Bank, Sonali Bank, Basic Bank, Citi Bank, NA, Pubali Bank UCBL, One bank, NCC Bank, Midland Bank, Mercantile Bank, were major lenders of the market, fund managers said.
Among the banks, 5 state run commercial banks lent Tk 1,573.00 crore at 7.52 per cent and 7 foreign banks let Tk 969.00 crore at 6.65 per cent.
– the Daily Observer
