Deadline for cold storage loan rescheduling extended to Nov 30
FE REPORT | Tuesday, 10 October 2023
The Bangladesh Bank (BB) has extended the application timeframe for cold storage operators to secure a loan rescheduling facility for their defaulted credits for a period of 10 years.
The Banking Regulation and Police Department (BRPD) of the central bank issued a circular on Monday regarding the deadline extension, now set to November 30.
BRPD Director Mohammad Shahriar Siddiqui said they previously issued a circular regarding loan rescheduling facility to the cold storage operators on July 13 and asked them to submit their application with necessary documents within 90 days of the issuance of that instruction.
He said the time will expire this week.
However, many cold storage owners have requested an extension of the deadline, as they have been collecting the required documents for obtaining the facility, such as a down payment in accordance with the existing policy, he said.
"That's why we have extended the application time up to November 30, 2023. But other instructions of the previous circular will remain unchanged," the central banker added.
According to the current rules set by the central bank, the down payment for rescheduling loans below Tk 1.0 billion stands at 4.50 per cent, while loans exceeding Tk 5.0 billion require a down payment of 2.50 per cent.
For rescheduling, banks will need to separate the balance of classified loans as of June 30 this year for cold storage owners in two accounts -- the principal amount in one account and the interest in a blocked account.
The BB said that interest will be charged on the principal amount as per the rule and borrowers will have to clear an instalment every six months.
Customers who are currently in default even after taking advantage of rescheduling and restructuring facilities earlier will also be eligible for the rescheduling facility. However, this facility will not be applicable in the case of loans created through fraud.
According to sector insiders, there are more than 400 cold storage facilities in the country with a capacity to store around 4.0 million tonnes of potatoes.
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