FT ONLINE

A writ petition was filed on Sunday challenging the legality of a circular issued by Bangladesh Bank setting lending rates on all loans except those on credit cards at 9 percent.

Mahfuzur Rahman, a law student of a university, filed the write petition, said his lawyer Barrister Syed Sayedul Haque Suman.

The bench of Justice Tariq ul Hakim and Justice Md Iqbal Kabir Lytton will hear the petition, he said.

Earlier on February 25, the central bank issued the circular setting lending rates maximum 9 percent for all sectors except credit cards with effect from April 1.

The lending cap will be imposed on all non-classified loans except credit card, said the circular adding that banks can charge maximum 2 percent additional as penalty for loans that will turn non-performing after the new rates take effect.

The central bank, however, kept the 7 percent lending rate for export financing unchanged.

The business community has long been calling to bring down lending rates to single digit saying a persistent high interest rates on lending put a barrier on private sector investment retarding the industrial growth.

Prime Minister, too, has called on banks to slash lending rates on many occasions to single digit in her effort to boost private sector investment and economic growth.