Bangladesh Bank (BB) has cut the interest rate for the Long Term Financing Facility (LTFF) under the Financial Sector Support Project (FSSP).
Under the FSSP fund for long-term financing, the banks can lend money for ventures in the industrial productive sectors for tenures of five to 10 years, under the condition that the banks would pay interest rate between 2.50 per cent and 3.00, including LIBOR (London Inter Bank Offered Rate) depending on the category of banks, said the central bank in a circular on Wednesday.
Earlier the rate was 2.50 per cent to 3.50 per cent including LIBOR.
The interest is being fixed considering the respective bank's CAMELS (Capital, Assets quality, Management, Earning, Liquidity, and Sensitivity) rating, a recognized international rating system that bank supervisory authorities use in order to rate financial institutions.
A BSS report said banks having CAMELS Rating of 1 (One) can lend money by 2 per cent interest including LIBOR for five year tenure, 2.25 per cent interest including LIBOR for seven years tenure and 2.50 per cent interest including LIBOR.
Banks having CAMELS rating of 2 (Two) can lend money by 2.25 per cent interest including LIBOR for five year tenure, 2.50 per cent interest including LIBOR for seven years tenure and 2.75 per cent interest including LIBOR.
Banks having CAMELS rating of 3 (Three) can lend money by 2.50 per cent interest including LIBOR for five year tenure, 2.75 per cent interest including LIBOR for seven years tenure and 3.00 per cent interest including LIBOR.
