Banks to decide on rate cut Mar 2
Thursday, 28 February 2008

Staff Correspondent

Banks will finalise their decision on lending rate cut on March 2 and submit their proposals a day after to the Bangladesh Bank, according to a decision taken Tuesday by Bangladesh Association of Banks.

Kazi Mahmud Satter, managing director of City Bank and chairman of Association of Bankers, Bangladesh has been assigned to prepare a draft proposal and place it before a sub-committee on interest rate spread. He will be aided by two other managing directors.

Two associations in the banking sector— Bangladesh Association of Banks and Association of Bankers, Bangladesh— earlier formed the sub-committee to scrutinise all aspects and consequences of rate cuts, said a bank official.

FBCCI administrator Syed Manzur Elahi heads the 10-member committee which will finalise the banks' common proposals on how to reduce the gaps between deposit and lending rates, as asked by the government and Bangladesh Bank.

The central bank had two separate meetings with the two associations last week and conveyed a clear message that banks have to reduce lending rates and service charges.

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