If this new system is introduced, the customer's loan interest rate may change every month.
BB is going to waive the interest rate limit of 9 percent to fulfill the loan conditions received from the International Monetary Fund (IMF).
The Bangladesh bank (BB) will determine a reference rate every month by considering the six-month average interest rate (weighted) of treasury bills, bonds, giving 9 percent loan interest.
The issue was discussed in the bankers' meeting held at the Bangladesh bank in Motijheel, Dhaka on Sunday. Bankers meeting are held every three months. Managing directors and chief executive officers of commercial banks participated in it.
The commercial bank can determine the loan interest rate by adding a maximum interest of three percent (3%).
Mazbaul Haque, BB spokesman and executive director said that the central bank is naming this corridor method of interest rate determination as 'Smart' (short term moving average) and said, 'Details will be disclosed in the next monetary policy. I hope it will be affected from July 1.
Discussions are still going on with the bankers. He also said to do more tests.
If this new system is introduced, the customer's loan interest rate may change every month.
Majbaul Haque said that Governor Abdur Rouf Talukder discussed future monetary policy, interest rate, import-export commodity price rate, dollar exchange rate, reduction of defaulted loans and cashless in this meeting.
The government has set a maximum limit of 9 percent on the interest rate of bank loans without credit cards from April 2020 to give money to businessmen at low interest rates. However, recently, Bangladesh Bank has given oral instructions to increase the maximum interest on consumer loans by 2 percent. BB has not yet issued any circular on this issue.
BB is going to waive the interest rate limit of 9 percent to fulfill the loan conditions received from the International Monetary Fund (IMF).
The average interest rate announced by Bangladesh Bank will be market based. BB will announce it every month, Mezbaul Haque said, "Every month, a reference rate will be announced based on the average interest rate of six months, which will be market-based. If it is seen that the average interest rate has gone down by one percent or is at a level that is not market oriented, then the central bank will determine the interest rate by understanding the market and announce the reference rate.
Banks can charge up to three percent loan interest from customers in coordination with the reference rate given by the central bank. Or can lend at the reference rate of the central bank.
Mezbaul Haque said that if the reference rate is announced using the 'Smart' method, it is currently 6.9 percent.
The dollar rate is not higher than the exchange rate of the BAFEDA:
Bangladesh Foreign Exchange Dealers Association (BAFEDA) and Association of Bankers’ Bangladesh (ABB) have been setting uniform rates for buying and selling dollars from foreign exchange houses following the BB’s decision to reduce volatility in the currency market since September last year.
In case of remittances coming to the country by changing the rate at different times, the maximum exchange rate of dollar will be 107 taka. Traders will get a maximum of Tk 105 per dollar in terms of export income. BAFEDA said that it will be effective from Sunday.
And in case of opening of import LC, the exchange rate will be determined by averaging the exchange rate of remittance and export. In this case, banks can charge an additional Tk 1 more with the highest average rate; That is, the spread limit will be Tk 1.
Dozens of banks are exchanging dollars at rates higher than those announced by the BAFEDA. Mezbaul Haque said that the banks have been warned about such allegations in the bankers' meeting on Sunday. BB is monitoring the matter.
BB will monitor export prices:
Mazbaul Haque said that the banks have been instructed to see whether the price of the exported products is appropriate or not. Banks will check whether the rate at which the goods are being exported is correct or not. Again, the export value is repatriated.
In response to the question whether BB has seen any irregularities in the export prices, Mazbaul Haque said, "We do not think so. We are just finding the risk areas. Banks will verify the correct rates of exported and imported goods.”
JH
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