Mir Nasir Hossain, Former President, FBCCI:
The lower the lending rate, the better it is for investment. The lower lending rate has a positive impact on investment. Banking sector is not the only weapon to boost investment; many other factors also influence investment. Investment gets a boost with the lower lending rate. Investment is dependent on many others things and single-digit lending rate facilitates investment.
There are many deposits in the state-owned banks. It will be better if the private banks get the deposits. At the same time, there are many corporate bodies with sizable funds. There is no harm if the banks get the banks. I am not sure if the private banks get the funds from the state-owned banks. I am not either if they get it in full. However, it is an obstacle to implementing single-digit lending rate.
Deposit is being affected to some extent due to the savings certificates. Because, the interest rate of the savings certificates is much higher. It seems that the government will not take any decision before election to lower the interest rate of savings certificates. The private banks are hard-pressed to implement single-digit lending rate due to deposits of the state-owned banks and high interest rates of savings certificates. As far as I am concerned, the banks are trying to implement single-digit lending rate.
Based on an interview by Ashiq Rahman, translated by Hossen Sohel