The consumer loan (retail loan) receivers have to pay the higher 13 percent interest starting from the new year, while other borrowers have to pay almost 12 percent, at 11.89 percent, in interest to the banks.   Bangladesh Bank (BB) announced the interest rates for January in accordance with the 'SMART' method it introduced since july..   The method on which the loan interest rate is now determined is known as 'SMART' or 'Six Month Moving Average Rate of Treasury Bills'. Bangladesh Bank informs this rate at the beginning of every month.   The six-month average interest rate (smart rate) on 182-day treasury bills was 7.10 percent in July this year, 7.14 percent in August 7.20 percent in September, 7.43 percent in October, 7.72 percent in November, and lastly in December smart rate increased to 8.14 percent.   According to the rules of the BB, banks can give loans in January by adding margin or interest at a maximum rate of 3.75 percent with the 'smart' rate of December. On the other hand, non-banking financial institutions can add margin at the rate of 5.75 percent.

The interest rate on loans from banks in October has been set at 10.20 percent as per Bangladesh Bank’s formula. The method, based on which the interest rate is now being determined, is known as “SMART” or “Six Months Moving Average Rate of Treasury Bills.” Bangladesh Bank informs of this rate at the beginning of every month. The new interest rate determining method was introduced on July 1, 2023. Earlier, from April 2020, the maximum interest rate on bank loans was 9 percent. With D grade Bangladesh Bank governor fares poorly in global ranking Accordingly, in the current month of October, banks can take a maximum of 10.20 percent interest on large-scale industrial loans. On the other hand, non-banking financial institutions (NBFIs) can charge interest against loans by adding a margin at a maximum rate of 5 percent. Their maximum interest rate will be 12.20 percent and 9.20 percent on deposits. However, the loan interest rate set in October cannot be changed within the next six months. This will make the highest interest rate on agricultural loans in September 9.14 percent. An additional 1 percent supervision charge can be levied on CMSME, personal, and car purchase loans. Bangladesh Bank introduces dollar booking policy for max 1 year  Bangladesh Bank publishes the 6-month average interest rate of 182-day treasury bills from January this year. Last January, the smart rate was 6.96 percent. After that, it gradually increased every month and reached 7.13 percent last May. But in June and July, it decreased slightly to 7.10 percent. However, it increased to 7.14 percent in August and reached 7.20 percent in September. On the advice of the International Monetary Fund (IMF), Bangladesh Bank introduced a market-based interest rate system. Despite Bangladesh Bank Governor’s decision to not raise exchange rate before election, dollar rate hiked again The interest rate cap of 9 percent was imposed from April 2020 to facilitate traders. A research report by the central bank also recommends withdrawing or increasing the interest rate limit. But Bangladesh Bank was silent as the government did not give positive consent. One of the conditions of IMF’s USD $4.7 billion loan is to make the interest rate market-based. In light of that condition, the new interest rate system was introduced.

Whether you find it awkward or call it queer, the sight of Omar Ali driving his battery-run auto-rickshaw in Kachua upazila of Chandpur district will force you to give it a second glance.