Stop sending SMS to collect deposit, BB asks NBFIs

FT ONLINE

The central bank has directed the non-banking financial institutions (NBFIs) to refrain from sending short message service (SMS) through mobile phone, offering high interest rate, to collect deposit.

"We've issued the directive to stop sending SMS (by the NBFIs), offering high interest rates for attracting people, including professionals, to collect deposit," said a senior official of the Bangladesh Bank (BB).

The NBFIs have already published their respective interest rates on both lending and deposit on websites, the central banker added.

"So there is no need to send SMS (to people), offering high interest rates to collect deposit (from them)," he noted.

BB issued a notification in this connection on Tuesday, asking the chief executive officers and managing directors of NBFIs to maintain the instruction for deposit collection.

The instruction came five days after advising the NBFIs to fix interest rate on deposit at a reasonable level for ensuring stability in the country's financial sector.

On June 21, the central bank asked the NBFIs to fix interest rate at a reasonable level.

Currently, the NBFIs are allowed to collect deposit from individuals and organisations.

On June 20, Bangladesh Association of Banks (BAB) Chairman Nazrul Islam Mazumder at a meeting said many insurance and leasing companies offer more than 12 per cent interest on deposit.

"This must be stopped. Otherwise, depositors will move to those companies," the BAB chief noted.

Currently, 34 NBFIs are running their business in the country.