The interest spread rate of scheduled banks declined below five percentage point for the first time in April as the credit demand from the private sector dropped significantly in the last few months due to political unrest, said officials of Bangladesh Bank.
Due to a declining trend in loan disbursement to the private sector, banks are now enjoying adequate liquidity which also plays role in declining the interest spread rate, a BB official told New Age on Thursday.
According to the BB data, the interest spread rate — the gap between the interest rates on credit and deposit — stood at 4.99 percentage point in accordance with the central bank limit.
The weighted average interest rate on advances and deposits was 13.64 per cent and 8.65 per cent respectively in April.
A number of banks have recently decreased the rate of interest on lending as the businesspeople are now adopting a ‘wait and see’ approach in expanding their business due to the recent spates of political turmoil, the BB official said.
Besides, the import growth in the last few months maintained a declining trend which also compelled the banks to lower their rate of interest on lending.
Besides, the banks have also lowered their interest rate on deposit products, he said.
The BB data, however, showed that 24 banks were charging higher interest rates on lending and offering lower rates for deposit collection in April.
The latest BB data showed six out of nine foreign commercial banks which are doing business in the country did not comply with the spread rate rules in April and their weighted average advance rates were higher than the local banks.
The spread rate in the nine FCBs stood at 8.52 percentage points while their weighted average advance rate was 14.31 percentage points.
The six FCBs are Standard Chartered Bank, Citibank NA, Commercial Bank of Ceylon, Woori Bank, HSBC and Bank Alfalah.
Among the local private commercial banks, 16 banks failed to comply with the spread rate rules.
They are AB Bank, National Bank, The City Bank, United Commercial Bank, Pubali Bank, Uttara Bank, Eastern Bank, Prime Bank, Dhaka Bank, Social Islami Bank, Dutch-Bangla Bank, ONE Bank, Bangladesh Commerce Bank, Premier Bank, Jamuna Bank and BRAC Bank.
Among the four state-owned banks, all but Agrani Bank and among the four specialised banks all but BASIC Bank successfully maintained the spread rate.
-With New Age input
