Banks should be setting interest rates, not others

Banks should be the only ones setting the interest rates as they offer loans at rates that are based on factors like cost of funds, credit worthiness of a customer and the prevailing market condition, said AKM Shaheed Reza, chairman of Mercantile Bank.

For example, he said someone with a lower credit score may be at a higher risk of default, so a bank will charge the borrower more than a regular client.

“Banks should determine the interest rates, both on lending and deposit, considering the market trend,” Reza told The Daily Star in an interview on the eve of the bank’s 20th anniversary.