Lending rate hike to fuel cost of doing business

The cost of doing business will definitely increase with a rise in the lending rate, said Mohammed Amirul Haque, managing director of Premier Cement Mills Ltd.

Some countries in the world have fixed lending rate while the market determines the rate in some nations, he said.

The central bank has authority to lift the lending rate considering the overall economic situation, but the gap between the deposit and lending rates should not be more than 3 per cent, Haque said.

The banks will create anarchy if there remains no mandatory gap between the lending and deposit rates, he said.

The monetary policy should focus more on the private banks, because they do not have a healthy financial condition right now, he said.

He, however, said the new monetary policy is a time-befitting one and it will help control the inflation.