Banks and financial institutions who failed to lower their interest rates to 9 per cent will not get government's annual development programme fund.

They will also not be able to receive savings or funds from autonomous and semi-autonomous government institutions, said a directive published.

The directive, issued by Financial Institutions Division yesterday, was signed by Deputy Secretary Md Jehad Uddin of the Ministry of Finance.

The move comes as a strong measure to compel banks to lower down interest rates to 9 per cent, as committed to the government.

Businesses have long been complaining of double digit interest rates, what has been seen as one of the key reasons behind lagging private sector investment.