April 20, 2009

BB issues lending rate at 13% notices

With the announcement of the government's stimulus package yesterday, the central bank simultaneously issued two circulars relating to limiting lending rate and loan rescheduling.

The Bangladesh Bank (BB) issued a circular asking the commercial banks to cap the lending rate except credit card and consumer loans at 13 percent to offset the fallout of global financial meltdown.

Another circular asked the banks to ease rescheduling of loans for recession-hit export sectors, such as frozen food, leather and jute goods, without any down payment.

Both the decisions would be implemented immediately and remain valid until the next order, the BB circulars said.

Finance Minister AMA Muhith yesterday unveiled the much-hyped stimulus package amounting to Tk 3,424 crore for the current fiscal year to tackle the immediate impacts of the global recession.

The BB issued both the circulars as part of the government's policy support to keep the economy vibrant amid the global financial crisis.

The circular regarding lending rate ceiling said the commercial banks charge high interest rates for productive industrial sectors, which is an impediment to the country's development.

“Lending rate cut has become urgent considering the present inflationary pressure and global economic situation,” said the circular.

So lending rate for agriculture, term loan and working capital for large and medium industries, housing and trading has been capped at maximum 13 percent, it said.

Interest rate for export credit will remain unchanged at 7 percent, the circular said.

The BB also allowed the banks to change interest rate for lending and deposit for more than once in a month. Before the circular banks could change the rate just once in a month.

In the second circular loan rescheduling has been made flexible for export-oriented sectors, such as frozen food, leather and leather goods, jute and jute goods, and textile including spinning and readymade garment.

The banks have been asked to reschedule loans for these sectors without any down payment. Earlier banks took 10 percent of outstanding loans as down payment to reschedule loans.

Announcing the stimulus package, the finance minister said the banks will take necessary measures if any other export-oriented sectors are hit by the onslaught of the global recession. The BB would look into the matter, he added.

Source: The Daily Star, April 20, 2009

1 comment:

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