BB to discuss interest rate, forex situation with bankers today

The Bangladesh Bank is set to meet with bankers today to discuss various banking issues including interest rate cap, the current situation of the foreign exchange market and the upcoming monetary policy.

“It is a regular meeting called ‘Bankers Meeting’ which will be held at 10:00am on Sunday at the central bank headquarter,” said a high official of the Bangladesh Bank.

The governor of the central bank Abdur Rouf Talukder will preside over the meeting while the chief executives of the banks will present.

The meeting will also discuss the central bank’s recent initiative for cashless Bangladesh, the current situation of unsettled cases in Artha Rin Adalat (money loan court) and the issue of building a specialised hospital for bankers, said the central bank officials.

In the upcoming monetary policy, the Bangladesh Bank is going to withdraw the single-digit lending rate and adopt a corridor interest rate system to meet the prescription of the International Monetary Fund (IMF).

The central bank will set a 4 per cent to 5 per cent corridor on the average of the interest rate of five types of bonds, said a BB official.

The central bank in January this year relaxed the lending rate cap for consumer loans, allowing banks to hike it up to 3 percentage points from the current level.

This means banks can charge up to 12 per cent in interest rates on consumer loans, instead of the previous 9 per cent, as per the monetary policy.

Mutual Trust Bank Managing Director Syed Mahbubur Rahman told The Business Post that there are some issues on the agenda but the issues of interest rate and the current situation of the forex market may be discussed in the meeting.

Mahbubur, also the former chairman of the Association of Bankers Bangladesh, said the forex market still is unstable which impacts the banks’ profitability.

A number of banks are not able to open letters of credit due to the US dollar shortage and the austerity measures taken by the government and the central bank, mentioned Mahbubur.

The Bangladesh Bank in January this year started a cashless campaign titled “Cashless Bangladesh” involving 10 banks, three mobile financial service (MFS) providers, and three international payment service providers (PSP).

Now the central bank wants to include all the banks in this campaign with a QR code payment system, said central bank officials.

The current situation of unsettled cases in Artha Rin Adalat (money loan court) is also a major issue on the meeting agenda. As of December last year, the Artha Rin Adalat recorded 72,189 cases and Tk 1,66,887 crore are stuck against those cases, shows the latest data of the central bank.