Banking policy
In an instant reaction to the government directive to cap the lending rate at 13%, the BB chief stated the measure would lead to reduction of the deposit rates by the commercial banks, as the public deposit was the “only” source of their funds. I think the remark was unfortunate, incorrect and not in the spirit of the government's honest intention. Instead of accepting the challenge gracefully at the government move to augment investment, he preferred to offer his counter strategy to offset the spirit of the move.
Our only request to the central bank would be to strictly ensure compliance with their directive with effect from the date of the announcement not only for the new loans but also for the existing loans. Otherwise, the commercial banks would try to delay or even deny the implementation to the borrowers on one excuse or the other as seen in the past.
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