Banks can now reschedule loans without downpayment
Tuesday, 22 December 2009
Siddique Islam
Commercial banks have been empowered to reschedule classified loans of the industries that were forced to close down or became sick during the last caretaker government without any down payment, officials said Monday.
Under the new provisions, the banks can now reschedule such loans on the basis of their relationship with clients until June 30, 2010.
"We've taken the move with a view to helping such industries regularise their loan portfolios, thus expediting the country's overall economic activities," a senior official of the Bangladesh Bank (BB) told the FE, adding that the banks would identify the really affected or closed down industries or businesses using their own assessment criteria.
The central bank issued a circular in this connection Monday and asked the chief executives and managing directors of all 48 scheduled banks to follow the latest instructions for rescheduling of the loans.
The BB official also said some activities of the caretaker government had created panic among the businessmen, particularly the big ones, and the industrialists while many of the businessmen had fled the country or gone into hiding to evade harassment of various types.
"Many of them were even detained in jail," he said, adding that many industries were closed down directly or became sick as they could not maintain normal production due to understandable reasons.
On December 6 last, the central bank extended both coverage and duration of the loan rescheduling facility for recession-hit export sectors without any down payment.
Instead of five specific sectors, all export-oriented sectors will now be entitled to the facility until June 30 next year.
Besides, the BB has allowed the commercial banks to reschedule their agricultural credits as long-term loans to facilitate farmers across the country.
"There is a scope of rescheduling the short-term agricultural loans, which would be treated as long-term ones after making required down payment," the BB said in a circular earlier.
Commercial banks have been empowered to reschedule classified loans of the industries that were forced to close down or became sick during the last caretaker government without any down payment, officials said Monday.
Under the new provisions, the banks can now reschedule such loans on the basis of their relationship with clients until June 30, 2010.
"We've taken the move with a view to helping such industries regularise their loan portfolios, thus expediting the country's overall economic activities," a senior official of the Bangladesh Bank (BB) told the FE, adding that the banks would identify the really affected or closed down industries or businesses using their own assessment criteria.
The central bank issued a circular in this connection Monday and asked the chief executives and managing directors of all 48 scheduled banks to follow the latest instructions for rescheduling of the loans.
The BB official also said some activities of the caretaker government had created panic among the businessmen, particularly the big ones, and the industrialists while many of the businessmen had fled the country or gone into hiding to evade harassment of various types.
"Many of them were even detained in jail," he said, adding that many industries were closed down directly or became sick as they could not maintain normal production due to understandable reasons.
On December 6 last, the central bank extended both coverage and duration of the loan rescheduling facility for recession-hit export sectors without any down payment.
Instead of five specific sectors, all export-oriented sectors will now be entitled to the facility until June 30 next year.
Besides, the BB has allowed the commercial banks to reschedule their agricultural credits as long-term loans to facilitate farmers across the country.
"There is a scope of rescheduling the short-term agricultural loans, which would be treated as long-term ones after making required down payment," the BB said in a circular earlier.