The New Nation - Internet Edition

BUSINESS REPORT

The country's banking is having two reverse faces, one is led by private banks rising depositors' interest putting at risks the central banks directives to reduce

lending rates, the spread and the cost of business.

The other one is the state owned commercial banks (SOCBs) which are roughly paying half as much of the interest to depositors on various schemes and also charging less on lending to business.

The two faces need harmonization to slowly come down closer to a meeting point; which may not be however possible in view of the less developed state of our economy and especially for banks in private sector, expert said.

A senior official of the finance ministry dealing with government owned banks said the SOCBs are not restricted from charging high rates or lower the same. These banks are being restructured under a corporatization scheme entrusting with decision making authority, he said.

But as leader of the country's banking system, they are also having corporate responsibility and they have to balance the whole thing in the greater business interest. The government is discouraging depositors pension scheme (DPS) as it claims higher interest, he said.

On highly differential interest rates charged by private banks as against the SOCBs, he said competition might reduce the gap in course of time.

Agrani Bank chairman and former finance secretary Siddiqur Rahman Chowdhury said the SOCBs are working to strike a critical balance between the borrowers and depositors interest.