Cost of funds of the Non-Bank Financial Institutions (NBFI) increased sharply in the recent months as reflected in the Cost of Funds Index (CoFI).
CoFI represents the weighted average interest rate reported for a given month by the non bank financial institutions.
Central bank estimation showed that cost of all the interest-bearing funds increased to 8.37 points in February this year which was 7.95 in December and 7.56 in November last.
Again, the adjusted cost of funds or cost of interest-bearing funds excluding the low-cost specific purpose scheme funds increased to 9.10 points in February this year from 8.65 in December and 8.21 in November last.
CoFI serves as the reference rate for pricing the variable interest loan products.
In setting the variable interest rate of a new loan, NBFIs add margin to the industry CoFI or Adjusted CoFI .
Bangladesh Bank issued guidelines on the Base Rate System for the NBFIs n 2013.
