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Spl facilities for defaulters

HC stays BB guidelines for two more months

Central bank submits a list of defaulters

FE Report | June 25, 2019 00:00:00

The High Court on Monday extended the stay order for two more months on the special policy guidelines of Bangladesh Bank (BB) that offered loan rescheduling and 'one time exit' facilities for defaulters.

On May 21, the High Court halted the guidelines for a month, five days after the central bank issued it.

The guidelines allowed defaulting borrowers to reschedule loans by paying 2.0 per cent down payment for a maximum period of 10 years.

They were also given the scope for availing the 'one time exit' facility getting all dues cleared within 360 days after approving such facility by the banks concerned.

The central bank's step to benefit bad borrowers drew strong criticism from economists and bankers who warned of a potentially disastrous outcome for the banking sector.

On Monday, the central bank submitted a list of defaulters stating the volume of defaulted loans to the High Court bench comprising Justice F R M Nazmul Ahasan and Justice K M Kamrul Kader.

While submitting the sealed document to the court, Attorney General Mahbubey Alam said the total volume of non-performing loans (NPLs) and 'inactive' loans in the country's banking system is worth Tk 2.2 trillion.

Of the total amount, some Tk 1.1 trillion is NPL, Tk 800 billion remains stuck in court orders, and Tk 300 billion is written-off.

However, he did not disclose the names of defaulters-neither the individuals, nor the companies-to the court.

Barrister M Moniruzzaman represented the central bank in the court while advocate Manzill Murshid stood as the petitioner's lawyer.

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