Three more months to wait for Single-digit interest rate

Sun Online Desk

2nd January, 2020 01:34:01 printer

Three more months to wait for Single-digit interest rate

The implementation of the proposed single-digit interest rate that was set to start from January 1, 2020, has been deferred for three more months.

Finance Minister AHM Mustafa Kamal on Wednesday said that the single-digit interest rate will now be implemented from April this year while he was talking to reporters after a meeting of the Cabinet Committee on Public Purchase.

The minister said that this deferment was made to avoid complications of implementation of the interest rate.

“Hopefully, the single-digit interest rate -- highest 6 percent for deposit and maximum 9 percent for lending -- will now be implemented from April this year. The government has taken a tough stance about implementing this rate,” he added.

He said all had been ready to implement the proposed 6-9 percent interest rate for the manufacturing sector from January 1.

“But, during a meeting with bankers, it was discussed that if the proposal is implemented for only the manufacturing sector, it’ll create lots of complications as many industrial sectors will be left out of the benefit,” said Mustafa Kamal.

“To avoid these complications, Prime Minister Sheikh Hasina wants to apply such single-digit rate for all kinds of banking loans. That’s why we’ve given a three-month time for banks to get prepared to apply the rate for all the sectors, the minister added.

He said all kinds of businesses -- from manufacturing to trading -- are contributing to the economy and therefore every sector should get the benefit of the single-digit interest rate.

Mustafa Kamal said it will initially be hard to implement the single-digit interest rate for all the sectors. “But once it’s implemented, the entire economy will largely be benefited.”

He also said banks pay 2-3 percent interest on deposits all over the world except a few countries like Bangladesh. “Even, in many developed countries, if you deposit money with banks, they’ll charge for such deposits instead of paying you interest,” he said, adding that if the single-digit interest rate is not implemented, there will be no industrialisation.