Bdnews24.com

The central bank will not issue banks licences to open new branches if they do not cut interest rates by next two months, a senior Bangladesh Bank official said Tuesday.

Deputy governor Nazrul Huda said at a press briefing that the Bangladesh Bank had decided not to issue licences for new branches on non-compliance.

Huda said they had had a series of talks with bankers on lowering interest rates and reviewing service charges.

"They (bankers) promised to lower the spread (difference between interest rates of deposit and loan) to 5 percent with no cuts in deposit interest rates by three months and revise the service charges as well," he added. Huda said one month of the promised period to cut the rates has passed.

"Bangladesh Bank would not issue licences for opening new branches if the rate cuts do not come by next two months," he said. Bangladesh Bank governor Salehuddin Ahmed told reporters Saturday that they could not just ask the banks to lower the rates.

Talks were held with bankers and they agreed to make an arrangement. Measures will be taken against banks with regard to opening of foreign exchange branches (AD branch) and other issues, Huda said at the briefing held on the central bank premises in Motijheel in the city.

The deputy governor said the decision to press banks to lower interest rates was in line with the recommendations of the Bangladesh Better Business Forum (BBBF) headed by the chief adviser. "We are not forcing bankers to do this but creating moral pressure in line with the BBF's suggestions. But we will have to exercise our power for (the banks) not complying with the issue and not revising the service charges," he said.

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