Business News

Stimulus Funds: BB Steps In As Banks Charge Higher Interest

The central bank yesterday asked banks not to impose more than 4.5 per cent interest rate on the funds disbursed from the stimulus package for the large borrowers in the industrial and service sectors. Some banks had imposed 9 per cent interest rate on the borrowers just after they gave out the loans under the package worth Tk 40,000 crore in violation of a central bank instruction, the Bangladesh Bank said in a notice.

The central bank introduced a Tk 30,000 crore stimulus package on April 12 last year and the volume of the stimulus package was extended to Tk 40,000 crore in phases. The end-users are supposed to get the loans at 4.5 per cent. Banks are allowed to receive an interest rate subsidy of 4.5 per cent from the central bank on the loans. But some lenders are charging 9 per cent, creating a financial loss for the businesses.

“The central bank will take punitive measures against the errant banks if they continue charging a higher rate,” said a central banker. The pandemic-hit affected clients who have already borrowed from banks can take a maximum of 30 per cent loans from their existing credit limit. The most affected borrowers will be given priority while disbursing the loans from the fund, and banks will provide the loans from their coffer. Banks have so far disbursed Tk 31,000 crore of the stimulus package.

Source: The Daily Star, 13-01-2021 Link: