NBFIs urge BB to revise interest rates upward

| Updated: May 25, 2022 17:11:21

NBFIs urge BB to revise interest rates upward

Top executives of non-bank financial institutions (NBFIs) urge the central bank to revise up interest rates on both lending and deposits to facilitate the sector's smooth run.

At a meeting Tuesday, they proposed the rate up at maximum 8.0 per cent instead of 7.0 per cent for term deposit with tenures of one year and above while lending rate at 12 per cent instead of 11 per cent only for small and medium enterprise (SME) loans.

The proposal was mooted at the meeting of the leaders of Bangladesh Leasing and Finance Companies Association (BLFCA) at the Bangladesh Bank (BB) headquarters in Dhaka with BB Governor Fazle Kabir in the chair.

An eight-member high-level team of the BLFCA, led by its Chairman Mominul Islam, attended the meeting.

"The central bank has agreed on the proposed interest rates in principle," the chairman of the BLFCA, a forum of managing directors (MDs) and chief executive officers (CEOs) of the NBFIs, told the FE after the meeting was over.

Mr Islam, also MD and CEO of IPDC Finance Limited, said: "We expect that a circular will be issued as early as possible in this connection."

Talking to the FE, Md. Golam Sarwar Bhuiyan, first vice chairman of BLFCA, said the central bank "has realized our need and assured us of considering our appeal positively".

The latest BLFCA move comes against the backdrop of fixing the interest rates on both lending and deposit by the central bank in line with banks'.

Earlier on April 18 this calendar year, the central bank fixed the interest rate at minimum 7.0 per cent on deposits and maximum 11.0 per cent in lending for NBFIs.

The fresh interest rates will come into effect from July 01, according the notification issued by the central bank earlier.

Earlier, the central bank had instructed all the scheduled banks to charge a maximum of 9.0-percent interest on all loans, save credit cards, as part of government initiative to bring down the rate to single digit since April 01, 2020.

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