Fir the first time ever, a bank has introduced negative Interest Rate system.
The Bank of Japan has become the first bank to introduce negative interest rate. The commercial banks will be charged by the Central Bank for deposits with a benchmark rate of -0.1% in the third largest economy in the world. The negative rate does not directly apply to ordinary customer accounts.
This system is designed to encourage the banks to invest their reserves in lending to businesses in an attempt to counter Japan’s economic stagnation. Japan is desperate to increase investment.
Japan has been desperate to increase consumer spending for many years. Few years ago, the country had even issued shopping vouchers for the same.
