A large number of commercial banks raised their interest rate on deposits in July this year narrowing the gap with lending rate.
At least 18 commercial banks have increased interest rates on deposits this month, while interest rates on lending remained almost unchanged in the country's banking sector, Bangladesh Bank (BB) officials said.
"The banks have increased the interest rates on deposits for receiving fresh funds from general depositors to keep their loan-deposit ratio, generally known as AD ratio stable," a senior treasury official of a leading private bank told the FE Thursday.
"At least 41 scheduled banks out of 47 have reported their interest rates on special notice deposit (SND) accounts in the current month in line with the BB's directive," a BB senior official said.
The banks will have to report on the SND accounts to the central bank each month regularly, he said, adding that the interest rates on SND accounts cannot be higher than the normal saving deposit accounts.
The country's commercial banks now offer interest rates upto 10.03 per cent on fixed deposits, while the rates for savings accounts at 8.50 per cent.
"The overall interest rate spread may decline in the coming months if the banks increase their interest rates on deposits keeping the lending rates unchanged," the central bank official said, adding that the BB is monitoring the interest rate spread closely.
Currently, the banks provide loans to large and medium-scale industries at interest rates ranging between 11 per cent and 13 per cent and to small industries at rates between 10 per cent and 18 per cent.
Interest rates on housing loans range between 9.99 per cent and 13.00 per cent and on consumer credits between 11.50 per cent and 19.50 per cent.
The banks' lending rates on working capital to large and medium scale industries vary between 10.25 per cent and 13 per cent and for small industries between 11.50 per cent and 17.25 per cent.
source: http://www.thefinancialexpress-bd.com
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