Banks reeling from Smart interest policy

Business Report :
Commercial banks appear to be in a fix regarding raising lending rates as per the latest interest-rate corridor called “Smart” as existing borrowers stick to repayment at old rates, according to bankers.
However, new customers who have signed an agreement over the past five days of this new fiscal year the commercial banks have applied the new lending rates which are barred from going beyond 10.1% as per referrals.
The six-month moving average rate of treasury bills (Smart) for June was 7.10%.
In addition, a maximum of 3% can be added in determining the lending rate for the banking industry.
Non-bank financial institutions can add a maximum of 5% on the 7.10%. This is variable — it will change every month.
The 9% lending-rate cap was scrapped with effect from the last day of June.
Smart came into effect on July 1 as per the latest monetary policy statement (MPS).
The deposit rates, in the meantime, have also been on an upturn for the last few months as there were speculations on the market that the lending rate of maximum 9% would go.
In the meantime, a nine-member delegation of the central bank, headed by its chief economist Habibur Rahman, will visit the Reserve Bank of India or RBI on 10-12 July over the interest-corridor issue.
RBI began such a corridor sometime in 2016. The team will visit the RBI Mumbai HQ where they will get practical experiences about the monetary management with the RBI. Bangladesh Bank introduced the interest rate targeting formwork from this July for the first time.