Bangladesh Bank lifts interest-rate cap on deposits

Bangladesh Bank lifted the minimum interest cap on term deposits collected by banks.

The central bank announced this decision through a circular issued by the Banking Regulations and Policy Department on Tuesday.

The central bank fixed the interest cap on term deposits on 8 August 2021 by adjusting it with the inflation rate. The central bank said interest rate on deposits would be no less than the rate of inflation.

At that time, inflation was around 6 per cent, and banks offered the interest on despite at that rate.

Currently, inflation soared to 9.49 per cent, and banks become unable to collect deposits at this rate. Amid this circumstance, the central bank withdrew the lower interest cap on deposits.