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Interest rate on HBFC loan

29 November 2004, 18:00 PM
LETTERS TO THE EDITOR
By M A Zahir Kazipara, Mirpur, Dhaka
29 November 2004, 18:00 PM
A few months have passed since the banks and some other financial institutions have reduced the rates of interest both on deposits and borrowings. This was done following a government decision to direct funds from being deposited in government securities and find way to stock market and other business opportunities. The purpose was also to reduce the cost of finance for industrial investments. HBFC is also a financial institution. So the rates of interest charged by HBFC to its borrowers should also have been reduced. But it has not done it so far.

The rate of interest charged by HBFC is in fact much more than what they claim it to be because of the very rigid conditions applied for recovery. In a long term loan case there may occur some variations in paying the loan instalments. But such exceptions are so heavily penalised in HBFC that the borrowers get bogged down in arrears thereby the loan repayment period is stretched beyond any imaginable limit.

The HBFC borrowers are mostly in the fixed income group whose repayment habits are much better than other commercial and industrial borrowers. So the rate of recovery of BHFC loan is known to be very high. As such these borrowers should not be deprived of the relief given to others.

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I would therefore request the appropriate authority to consider lowering the rate of interest on BHFC loan in line with other iinstitutions.