The central bank has hiked the interest rates on deposit collection to 9.13 per cent and loans at 12.13% for the country's non-banking financial institutions (NBFI).
The new rates are scheduled to come into effect from July 1 under a new interest rate system, the Bangladesh Bank said in a notice issued on Tuesday.
The regulator introduced a new market-based reference rate along with a margin last Sunday.
It fixed a 2 per cent interest margin on the Short-Term Moving Average Rate (SMART)- the six months moving average rate on 182-day Treasury bills yields- for deposit collection by NBFIs. In addition, a 5 per cent interest margin on SMART was fixed for lending.
For June, the SMART is at 7.13 per cent, as per the central bank website.
As a result, the deposit rate will be at 9.13 per cent and lending rate will be at 12.13 per cent.
The NBFIs will be able to impose an additional 1 per cent charge yearly on the interest rate for cottage, micro, small and medium enterprise (CMSMEs) sector and consumer loans.
In April of last year, the Bangladesh Bank had set interest rate on deposits at 7 per cent and loans at 11 per cent for the NBFI sector, which came into effect from July 1 last year.
Previously, some NBFIs offered a maximum of 15 per cent interest against their deposit products.
The NBFIs high officials welcomed the central bank's move to introduce a new interest rate system.
“The latest move by the regulator will help us to mobilise deposits because the interest rates will increase,” Md Golam Sarwar Bhuiyan, chairman of Bangladesh Leasing and Finance Companies Association, a forum of top NBFI executives, told The Business Post.
He said the NBFIs sector is now facing a liquidity crisis but now we hope that the crisis will end soon.
“Most of the NBFIs were not able to mobilise deposits at previous fixed 7 per cent interest due to skyrocketing inflation.”
