Cost of Funds:

[Shah Alam Kabir Pramanik]

Cost of Funds:
Recently the costs of funds have increased in both public and private sector. The average cost of funds of public and private sector are 8.12 % and 11.32 % respectively.
In public sector, government are the sources of funds that’s limit the cost of funds. In private sector almost all funds are collected from customers’ deposits that are the sources of funds. Public institutions have competitive advantage in this issue. Public institutions can decrease the interest rate to obtain a competitive place in the marketplace and to solve the housing deficiency in Bangladesh. Really high cost of funds leads private institutions in backward position.