Defaulting borrowers have two more months to apply to banks

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FE Report The persons who borrowed money from banks to set up industries, which later turned sick or got closed, have now two more months to apply to their banks concerned for resolving the loan accounts, officials said Tuesday. The industries have been identified by the government. Under the new provisions, the borrowers have been allowed to apply to their banks concerned for settling the loan accounts until October 20 this year. The Bangladesh Bank (BB) issued a circular in this connection Tuesday and asked the chief executive officers and managing directors of the commercial banks to receive the applications within the stipulated time. The central bank earlier advised the commercial banks to settle the loan accounts of sick or closed industries identified by the government. "We've extended the time-limit for submitting applications by the borrowers to their banks concerned for settling such loan accounts considering the business community's recommendations," a BB senior official told the FE. He also said the central bank has already sent a list of identified sick industries to the commercial banks. The government earlier identified 348 textile and ready-made garment industries as sick and announced a financial package for rehabilitation of those units. Besides, the ministry of industries has already identified nearly 600 industries as sick, but is yet to announce any incentive package for the newly-identified sick industrial units. The banks' boards of directors may settle such loan accounts considering the merit of a case based on bank-clients relationship before announcement of incentive packages by the government, the BB said earlier in a circular. The banks are now allowed to transfer overdue amount of loans to block accounts with flexible repayment schedule for settling such loan accounts, according to the circular. It also said the interest accrued but not charged, interest on suspense accounts and penal interest may be exempted fully or partially. In case of sanctioning fresh loans, the boards of directors of the banks can relax the terms and conditions for down payment. The banks may seek no-objection certificates from the central bank on case-to-case basis, if necessary.