Banks delaying loan interest rate cut unexpected
Dr. Ahmed Al Kabir, Former Chairman, Rupali Bank Ltd : The procrastination of banks in reducing loan interest rates down to single digit is not good in any way. In the mean time, banks have cut their deposit rates. However, if they really did that, this procrastination defies all logic. Spread in banks should not exceed 4-5% in any respect. Even the government assured that spread will not exceed 5%. If that is so, maintaining single-digit loan interest rates is not difficult.
Controlling the private sector is tough. Maybe that’s why banks try to take this opportunity. But if the government is strict and takes a different kind of preventive action, the banks will ultimately relent even if they procrastinate. This might take some time, but now banks will accept deposits at low interest. This transition period might take three to four months. Nevertheless, the government has to become strict, as well as the monitoring organization Bangladesh Bank along with the banking sector.
The bank association has given its word to both the government and the public that loan interest rates will be reduced to single-digit. They should implement it. And I do not believe that they will back off from a promise made to the people.
Based on an interview by Ashiq Rahman, translated by Abrar Hussain