Saturday, 18th May, 2024
Saturday, 18th May, 2024

Banks asked not to charge more than 4.5pc on borrowers

The Bangladesh Bank (BB) on Tuesday cautioned banks not to charge borrowers more than 4.5 per cent interest while borrowing from stimulus packages.
The central bank in a notification at head office on Tuesday said it has noticed some banks are charging borrowers the full 9 per cent interest against loans under several stimulus packages despite the government commitment to pay the half or 50 per cent interest for such loans.
The borrowers are facing financial problems due to imposing the entire interest load in variance of the government announced interest package on loans under various stimulus packages.
It asked banks to charge 4.5 per cent interest while the remaining 4.5 per cent interest must be left for te government to be repaid.
Some banks have fixed the time to repay the loans and also imposing 9 per cent interest, which is creating a burden on clients, said a BB official. In the prevailing situation if a borrowers’ is unable to repay the loans in time, banks can impose the entire interest rate on them and treat it as clients’ liability.
Bangladesh Bank is however considering extension of loan repayment moratorium up to March 31 and if it is being approved, borrowers can be relieved from liability of making full 9 percent interest on loan repayment.
The government has announced 19 stimulus packages in the form of low-cost loans for various segments of te economy to quickly recover from the impact of the pandemic. The combined support accounted for 3.7 per cent of the country’s gross domestic product.
The largest of these packages is for affected industries and services sector amounting to Tk 40,000 crore. The interest on this loan is 9 per cent however to be equally shared by borrower and the government.

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