Home Bank & Finance Deposit rate will not be less than inflation
Bank & Finance - August 9, 2021

Deposit rate will not be less than inflation

Staff Correspondent: Banks won’t be allowed to fix the interest rate of the deposits below the inflation, the Bangladesh Bank (BB) instructed yesterday.
The central bank issued a circular directing the managing directors and chief executive officers of all banks in this regard.
Bangladesh Bank came up with the circular based on a discussion that stated the interest rate of bank deposits is gradually dropping recently.
According to latest report of Bangladesh Bureau of Statistics (BBS), the inflation rate was 5.64 percent in 2021, which was 5.56 percent in fiscal year 2020-21.
Bangladesh Bank said and livelihood of depositors and a part of other depositors depends on the interest rate of the deposits.
Interest rates below inflation is hindering the buying capacity of depositors, which also inflicting them, BB stated.
Observing the bank statements, it was noticed that most of the banks are providing interest rates for deposits below the inflation rate, the central bank said.
The banks will struggle to collect funds if the interest rate of bank deposits decreases drastically, which may also trigger imbalance in liability-asset management of banks, BB warned.

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