Loan repayment is relaxed further for industrial sector borrowers on condition that they ought to pay half their credits for October-December quarter by this yearend to get the non-classification facility.
Earlier, the provision was minimum 75 per cent of a loan installment to be paid to avert being declared classified.
Bangladesh Bank's Banking Regulation and Policy Department (BRPD) issued Sunday a circular on the latest facility, instructing top executives of the scheduled banks to immediately go by the order.
The latest BB concession would benefit only large borrowers. Nothing is there for small and individual borrowers, whose income decreased significantly for the ongoing volatility in the global supply chain following the Russia-Ukraine war in lockstep with Covid-induced shocks.
According to the circular, if 50 per cent of the loan installments of the last quarter of the calendar year are paid within this December, the loans would be marked as "non-classified".
Due to the prolonged Russia-Ukraine war situation, its long-term negative effects have increased the cost of production in the industrial sector. "As a result, the real income of the borrowers has decreased," says the central bank in the circular.
For this reason and in order to keep the economic activities of the country dynamic and to make it easier for the borrowers to pay the loan installments, the central bank has relaxed loan-repayment provision.
The installments or unpaid portion of the installments due from April to December 2022 of the term loans will be payable in equal installments (monthly and quarterly) within one year after the expiry of the predetermined period of the existing loan, the circular states.
However, on the basis of the banker-customer relationship, installments can be rescheduled and collected as per the new schedule, taking into consideration the remaining tenure and extended one-year period.
Other instructions of earlier circulars in this regard will remain unchanged.
Meanwhile, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) recently sought extension of loan-moratorium facility by another six months until June'23, claiming that the economic activities have yet to become normal and affected traders are still in dire straits because of global supply-chain disruptions in the wake of the Russia-Ukraine war.
Less than a week after the FBCCI meeting with BB Governor Abdur Rouf Talukker, the announcement on relaxation of the loan-repayment provision comes.
The defaulted loans in the banking system soared to Tk 1.34 trillion at the end of September from Tk 1.25 trillion at the end of June, according to the Bangladesh Bank data.
Of the amount, Tk 1.18 trillion turned bad which the central bank apprehends as not recoverable. The NPLs had jumped by over Tk 311 billion from Tk 1.03 trillion in December 2021 in just nine months.
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