BB extends suspension for adverse loan classification

The central bank has extended the suspension period of adverse classification of any loan by three months more to facilitate business activities that have been affected by the coronavirus pandemic.

Under the latest relaxation, all the scheduled banks have been instructed not to adversely classify any loan until September 30, according to a notification issued by the Bangladesh Bank (BB) on Monday.

Earlier, the banks were asked not to classify loans until June 30.

Besides, the payment of term loan installments has been deferred from January 01 to September 30 this calendar year, officials said.

Due payments for the demand and continuous loans have also been deferred by nine months or till December 31 this calendar year whichever is earlier, they explained.

"All types of borrowers will be benefited from the relaxation of our policies," a BB senior official told the FE while explaining the objective of the latest policy relaxations.

He said the banks will not be allowed to impose any penal interest on such loans during the period under review.

Earlier on March 19 last, the central bank relaxed its policy asking the banks to suspend adverse classification of any loan until June 30 on the same ground.

Meanwhile, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) requested the central bank to extend the existing time limit for non-classification of loans by six months to December, 2020 considering the Covid-19 pandemic.

The country's apex trade body made the request on June 08 last in the wake of the adverse impact of the pandemic on trade and economy.

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