Dhaka: Private banks will charge highest 9 percent interest in lending from July next.

This was decided at a meeting of the Bangladesh Association of Banks (BAB) on Wednesday with the organisation’s chairman Nazrul Islam Mazumder in the chair at Jabbar Tower in the city.

BAB is an organisation representing private bank sponsors in the country, reports the UNB.

Following the meeting, the BAB head informed that the organisation took the decision as per directives of the Prime Minister Sheikh Hasina to lower the bank interest to single digit.

He said the private banks will provide highest 6 percent interest to depositors for 3-month term deposits while they will charge highest 9 percent interest on any lending fromJuly 1.

‘No bank will charge beyond this limit’, he added.

Mazumder, also sponsor chairman of Exim Bank, said if any bank goes against the BAB decision, it will take punitive actions against those banks.

He informed that already 5 private banks including Islami Bank Bangladesh Limited (IBBL), Union Bank, Fast Security Islami Bank and Al-Arafa Islami Bank announced their decision to charge single digit interest on bank loans fromJuly 1.

These banks share about 50 percent of the total banking business, he said.

‘If they can go for such a bold decision to bring down the interest rate to a single digit why don’t others do the same,’ heraised the question confirming implementation of the decision in all other private banks.

The BAB president said if any top management or managing director fail to comply with the decision, the board of sponsor directors of the respective banks will take punitive actions against them.

If necessary, BAB will extend its hand to ensure the implementation of the decision on single interest rate, he added.

The country has 57 banks of which 6 are state-owned banks while remaining are private and foreign banks.