Interest rates on NBFI loans rise further

Alongside the banks, the interest rates on loans and deposits of non-bank financial institutions (NBFIs) have surged further.

In March, the NBFIs will charge a maximum interest rate of 15.36 per cent on loans and provide a maximum of 12.36 per cent on deposits. 

The interest rise came in the aftermath of the Bangladesh Bank's new system for interest adjustment. Now, the interest rates are rising on a monthly basis, inflicting strains on businesses, entrepreneurs and other borrowers.  

Under the new system, the base rate of loan interest is determined based on the Six Months Moving Average Rate of Treasury Bills, or the SMART system.

An additional 2.50 per cent of interest, instead of previous 2.75 per cent, will now be added to the base interest rate for deposits, while the extra interest on loans will be reduced from 5.75 per cent to 5.50 percent, which will be added to the base rate. 

The Bangladesh Bank clarified that the revised interest rates are applicable only to new loans and deposits at the NBFIs. The existing loans will have their interest rates adjusted every six months.

In February, the additional interest was slashed slightly as the SMART interest rates climbed. Meanwhile, the bank loan interest surged by 13.11 per cent this month from 12.43 per cent in February.