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Earlier this year, the Finance minister had said that the interest rate in the banking sector will come down to single-digit. According to media sources, although the single-digit interest rate on bank loans would primarily affect corporate clients, consumer loans, retail loans and other similar categories of credit seekers will not get any relief from banks.
Under current global situation, reducing the interest rate will be beneficial for overall development of the economy. Therefore, entrepreneurs and manufactures of the country will become better equipped in face of global competition. Since our country is now exporting more commodities to other countries, if the interest rate is not at par with them, it will be difficult for our companies to survive.
The single digit rate will not be implemented immediately but Bangladesh Bank has advised all banks to take necessary steps for a gradual change. Old financial institutions might find it difficult to execute single-digit rate but already some of the commercial banks have decreased their lending rate as well as their deposit rate.
Experts believe that the reduced rate will help businesses to expand, especially the large scale entrepreneurs. This way, private sector investment will also increase which is a long awaited goal of the government. It can be hoped that entrepreneurship, investment and industrialization will be boosted through the new rates.
The decision to lower the interest rate will certainly have a positive impact on Bangladesh’s economy and similar policies which will help achieve higher economic growth should be undertaken by authorities concerned.