Central bank board to look for ways to implement single-digit interest rate

The Bangladesh Bank board will discuss a report on the implementation of the single-digit interest rate for industrial sectors on Tuesday. 

A committee headed by a deputy governor of the central bank has prepared the report including recommendations to bring down the lending rate below the double-digit. 

To assist entrepreneurs, the board is expected to finalise some directives after analysing the report as high-interest rates are hampering the industrial sector. 

This is the top agenda of the 400th meeting of the Bangladesh Bank board.  The committee formed, at the instruction of Finance Minister AHM Mustafa Kamal, submitted its report to central bank Governor Fazle Kabir on December 12. 

Following extensive discussions, Deputy Governor SM Moniruzzaman-led committee has finalised the mechanism to cut the interest rate. 

Officials at the central bank said it may issue a circular – capping the interest rate at 9 percent for some particular sectors from January 1. 

The circular is likely to have a punitive measure, making borrowers pay extra interest if they fail to repay any instalment. 

To cut the costs of fund of the commercial banks, the committee recommended for keeping the government funds as current deposits.

However, the committee considers that the funds under various government projects can be kept as term deposits.