Bangladesh Bank on Tuesday has lifted the lowest interest rate threshold for mobilising deposits.
From now on, banks will be able to set interest rates in line with their business interests and collect deposits accordingly.
The central bank announced the decision through a circular on Tuesday (December 12).
The Banking Regulations and Policy Department of the BB issued the circular on Tuesday and sent it to the top executives of the scheduled banks for immediate implementation.
The circular stated that the lowest interest rate for deposits was fixed. According to that directive, the central bank instructed all the scheduled banks of the country not to keep the interest rate of fixed deposits below inflation.
At that time the maximum interest rate for disbursement of loans was 9 per cent. But now there is no such limit in terms of loans. The market-based interest rate system for loans was introduced in July this year.
Hence, there is no need for the lowest interest rate threashold on deposits as well. Owing to this, the instruction of August 8, 2021, was canceled, the BB notification said.
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