BB issues new instructions for existing bank credit

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DHAKA, May 30, 2018 (BSS) – Bangladesh Bank (BB) today issued new
instructions for banks to avoid the increasing trend of lending rate.

“Banks can’t increase the rate of interest if the rate is fixed. In case of
flexible, variable or floating interest rate, banks can increase the rate
once in a year,” said a BB circular issued today.

For increasing the interest rate, the circular said, banks will have to
issue notice to the borrowers at least three months ago.

In case of term loans, banks can increase the lending rate by 0.50 percent
each time.

But, in case of current capital and other loans, they can increase the rate
up to one percent, the circular said.

In another circular, BB asked banks to keep the average intermediation
spread rate at 4 percent for credit cards, consumer loans and deposits.

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