Consumer loan interest rate increased, no limit on deposit interest

Bangladesh Bank has removed the fixed interest rate on bank deposits. From now on, banks and financial institutions will be able to set their own interest rates on deposits. This announcement was made in the monetary policy announced for the six months of the current fiscal year 2022-23 on Sunday. Bangladesh Bank announced this new monetary policy at 3 pm today.

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In the new monetary policy, the minimum interest rate on deposits has been completely lifted considering the current market conditions. Apart from this, the new monetary policy has also announced an increase in consumer loan interest rates. Bangladesh Bank has said that the interest rate can be increased up to 3 percent in the case of consumer loans. At present, the interest rate of all types of bank loans is fixed at 9 percent. Now the banks can increase the interest rate of consumer loans up to 12 percent. As a result, banks will be able to increase the interest rate on current consumer loans. However, no specific announcement has been made to increase the interest rate in the case of industrial loans and other loans.

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Bangladesh Bank said, the removal of fixed interest rates on other loans will be under consideration. In the new monetary policy, Bangladesh Bank says that opening the deposit interest rate and slightly relaxing the loan interest rate will help increase the deposit interest rate. Earlier in August 2021, Bangladesh Bank fixed the minimum interest rate on deposits. At that time Bangladesh Bank's instructions said that the interest on term deposits of three months and above cannot be lower than the average inflation rate of three months. In April 2020, after fixing the loan interest rate at 9 percent, the deposit interest rate was also brought down to 2.5 percent. At present, where inflation has risen in the country, banks have to increase the interest rates on deposits. But since the loan interest is fixed, the banks have to face the problem in adjusting the interest on the loan and deposit. For this, the banks have been demanding to withdraw interest on loans and deposits.