Minimum Interest Rate on Deposits Will Remain Unchanged

The central bank has rejected the recommendation of the bank's managing directors (MDs) to change the minimum interest rate on deposits.

The decision was announced at a virtual meeting of Bangladesh Bank with the chief executives of the banks on Wednesday (August 11).

Sirajul Islam, executive director and spokesperson of Bangladesh Bank, said, "Although the managing directors of various banks have requested for interest on deposits, arguments have been put forward to maintain interest rates on deposits from Bangladesh Bank."

On August 8, the central bank issued a circular fixing the minimum interest rate on deposits and sent it to the managing director (MD) and chief executive officer (CEO) of all scheduled banks. The circular was directed to be implemented immediately.

At present, the country's banks offer interest rates or profits at an average rate of just over four per cent. The central bank has taken this decision out of fear that a sharp fall in interest rates could have an adverse effect on bank deposits in the future. The circular also asked to take into account the average inflation rate of the previous three months in determining the interest or profit of the deposit.