Govt to go tough for enforcing single digit interest rates from April

Finance Minister AHM Mustafa Kamal on Sunday assured businessmen that the government will take a hard line on banks if they do not bring interest rates down to 9 percent from April 1. 

The finance minister said this at a view exchange meeting with businessmen at the minister's office at Sher-e-Bangla Nagar in the capital. Commerce Minister Tipu Munshi was also present at the meeting. 

National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem presented the initiatives taken by the government to solve the existing problems regarding setting up scanners in custom houses. 

He also said the government would properly implement the VAT law so that taxpayers can get rebates. Besides, the businessmen were asked to remain cautious to keep the price of daily necessities stable during the month of Ramadan.

A business leader present at the meeting said they had asked the finance minister the reasons for the delay in implementing the single-digit interest rate. 

The minister responded that 9 percent interest rate for industrial loans was supposed to be implemented from January 1, in phases. Later, the government decided to implement it for all sectors instead of for the manufacturing sector only. 

As per their demand, the banks have been given time until April 1 for implementation. If any bank fails to do so within the stipulated time, the government will go tough on them. 

Siddiqur Rahman, first vice president of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), told The Business Standard, "The finance minister asked the businessmen what measures they would take to keep the market stable during Ramadan."

The finance minister asked the FBCCI to form a monitoring cell to keep the market steady during Ramadan, Siddiqur added.

The decision of a 9 percent interest rate for all loans except credit cards was taken after a meeting with the Bangladesh Association of Bankers. However, banks are worried their business may drop due to the new decision. 
At present, the interest rate in different banks is 11-14 percent for production sector, 9-16.5 percent for trading sector, 9-16 percent for small enterprise, 10-14 percent for house loans, 12-18 percent for a personal loan and 15-25 percent for credit cards, according to sources.

The government also asked the FBCCI to communicate with businessmen to know their demands beforehand, and it has been assured that the government would take necessary steps in this regard, said Siddiqur. 

About their demands to the NBR, the business leaders said proposals have been submitted to set up the digital scanner in all ports including Chattogram Port to stop harassment of traders and to ease export and import.

In the meeting, business leaders asked the NBR chairman to take actions to ensure VAT refunds for traders.