Bank lending rates capped at 13%

The central bank has asked banks to cut lending rates to a maximum 13 percent except for credit card and consumer loans to help deal with the fallout of global financial downturn on Bangladesh's economy.

It also asked the banks to allow loans defaulted by recession-hit sectors to be rescheduled without down payment in the next six months.

Bangladesh Bank governor Salehuddin Ahmed told reporters after a meeting with chief executives of pubic, private and foreign banks Tuesday that only the affected ones will get the scope.

"The banks will take the steps based on their relations with the customers," Ahmed said.

The highest interest rate for all except consumer and credit card loans is currently 14.75 percent.

"We are also facing the impact of ongoing global recession," Ahmed told reporters after a meeting in the bank's headquarters in Motijheel.

"To compensate the loss and increase investment the banks have been asked to lower the lending rate to 13 percent."

Mahmud K Sattar, chairman of the Association of Bankers Bangladesh, an organisation of the bank executives, said they would try to comply with the central bank directives.

The easing of loan rescheduling conditions for the affected sectors might also help to deal with the aftermath of the recession, he said.