Depositors bear brunt of interest rate cut
Survey finds
Staff Correspondent
The bank interest rate cut enforced last year has hardly benefited the people, as the banks reduced the interest at the cost of the depositors, a recent survey found. The survey conducted by the Centre for Policy Dialogue (CPD) showed the local private sector banks reduced their lending rate from 14.12 percent to 12.34 percent in 2003. They claimed thus the interest rate spread was reduced from 7.05 percent to 6.21 percent. But, the banks at the same time had decreased the deposit interest rate to 6.12 percent from 7.07 percent. As a result, the interest rate spread (gap between lending and deposit interest rates) has remained almost unchanged. The survey also found that the spread in the foreign banks actually have increased to 7.68 percent from 7.40 percent.
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