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BB to fix interest rates for NBFIs too

Bangladesh Bank (BB) has decided to fix interest rates for Non-bank financial institutions (NBFIs), as it does for banks, to resolve the issue of their charging harsh interest rates of up to 15 to 18 percent.

The central bank decided on this at the 420th board meeting of Bangladesh Bank, held on Sunday, UNB reports.

Md. Serajul Islam, the executive director and spokesman of BB, told UNB that the central bank would soon issue a notification on fixing the interest rate for NBFIs.

Although the interest rate for bank borrowing is 9 percent as stipulated by the BB, there is no such rate fixed for loans from NBFIs yet, he said.

“NBFIs are charging interest rates as they wish. Some financial institutions are charging 15 percent to 18 percent interest rate which is not compatible with the market. So the BB decided to bring down the interest rate or profit of deposits and loans, lease and investment at a reasonable level,” Serajul said.

Replying to a query the BB spokesperson said the board had given policy approval to fix interest rates for both deposit and lending, and both would be reduced analyzing the situation.

The board has taken a positive decision to temporarily increase the size of the Export Development Fund (EDF).