BB for lower interest rate on industrial loan  

Bangladesh Bank will ask the scheduled banks to set a reasonable rate of interest on industrial loans in a bid to increase the inflow of credit in the productive sector, said officials of the central bank.

The BB will give the direction at a ‘bankers meeting’ led by its governor Atiur Rahman which will be held today at the central bank headquarters in the capital.

Bangladesh BankManaging directors and chief executive officers of all banks will attend the meeting, reports the New Age .

A BB official told New Age on Sunday that the central bank would give the direction when the country’s private sector credit growth continued to maintain a declining trend in the recent months due to political uncertainty.

The banks are now imposing the interest rate between 16 per cent and 18 per cent on the industrial loans which discouraged the

businesspeople to receive credit to expand their industrial units, he said.

The BB will also ask the banks to take initiative to increase their overall credit growth so that the central bank will implement its monetary programme.

According to the BB data, the year-on-year credit growth in the private sector stood at 11.39 per cent in May 2014 from 11.86 per cent in the previous month.

The central bank set 16.5 per cent credit growth in the private sector for January-June of this year.

The central banker, however, said that it was a tough job for the banks to increase their credit growth as the businesspeople were yet to regain their business confidence amid political uncertainty.

At the bankers’ meeting, the central bank will review the banks’ initiative whether they took proper measures to reduce their excess capital market investment by 2016 in line with the BB directives.

The BB will ask the banks to maintain their service charge at a tolerable point as some banks have recently imposed higher service charge without taking any consent from the clients.

The BB will review the banks’ performance to implement Bank Company Act (amended) 2013.