Mushfiqur Rahman, chairman of the committee, presided over the meeting at the Sangsad Bhaban. Finance Minister M Saifur Rahman, Bangladesh Bank Governor Dr Fakhruddin Ahmed, Finance Secretary Zakir Ahmed Khan, representative of Bangladesh Association of Banks, high officials of the finance ministry and different commercial banks attended the meeting. Members of the committee were present.

Saifur disclosed in the meeting that the finance ministry would sit with the business leaders to discuss fiscal and monetary policies every three months to improve investment. Funds from the World Bank would be used to improve infrastructure problems, he said.

The finance minister said commercial banks charge high rates to earn excess profit. The spread between the cost of fund and lending rate in Bangladesh is as high as 4 percent, which should be between half a percent and 1 percent, the minister said.

He said banks spend lavishly on luxury, which does not reflect the social condition of the country. "Rooms of the bank executives are larger than the one used by the prime minister," he said.

He said such luxurious spending must be stopped to lower interest rates and added that the government has lowered rates on savings interments to pave the way for cutting lending rates by banks.

Saifur said he was criticised by his cabinet colleagues for lowering rates on savings instruments, which affected the small savers and pensioners. Still, the government stuck to its decision to help banks cut their lending rates, he said.

The BB governor said interest rates in Bangladesh are the highest compared to Pakistan, India or Sri Lanka. He said in spite of initiatives by the central bank, the banks are not responding positively.

Addressing the meeting, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Abdul Awal Mintoo said the Bangladesh Bank should intervene to cut interest rates of banks.

He said the central bank should give interest to commercial banks on their cash reserve requirement.

Representatives of commercial banks said the government should not impose any restrictions on commercial banks to cut rates.

The banks have started slashing interest rates following the measures taken by the finance ministry and the central bank. Rates would be cut further in the coming days, they said.