Relaxed exit policy allows closing loan account at cut down payment

Down payment is halved to 5.0 per cent of the unpaid loans of borrowers to avail the option of closing off their loan accounts through a regulatory policy sweetening.

The central bank relaxed the prevailing exit policy in view of businesses' hardship in tough times, sources said.

Issuing a circular Monday to this effect, the banking regulation and policy department (BRPD) of the Bangladesh Bank (BB) said banks will settle applications within 60 days after receiving them from borrowers.

The exit facility must be approved by the board of directors/executive committee of each bank, although bank management will have the authority to grant the exit facility for loans up to Tk 2.0 million, the circular says.

The exit facility-availed loans cannot be considered for debt rescheduling or restructuring at any cost. If the borrowers fail to repay the loans after the exit facility, the banks will take necessary legal action to realise the dues.

Talking to the FE writer, BRPD director Mohammad Shahriar Siddiqui said the banking regulator made the relaxation in exit-policy rules considering concerns of many companies which face difficulties in continuing business here.

"With the revision," he says, "the borrowers can avail the facility through paying only 5.0 per cent of the outstanding as down payment instead of existing 10 per cent."

And the powers of the bank management have also been enhanced with the authority vested in them to grant the exit facility for loans up to Tk2.0 million instead of Tk 1.0 million.

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