Good borrowers to get 10pc rebate on interest

The central bank of Bangladesh has issued a policy for good borrowers for the first time aiming in a bid to establish a sound credit culture.
A borrower will be considered as good one if his or her loan accounts -- continuous, demand and term -- are unclassified-standard for three consecutive years, according to a circular issued by the Bangladesh Bank (BB) on Thursday.
Under the new policy, the good borrowers will enjoy 10 per cent rebate on interest, paid by them, in the third year. Such a facility will remain effective in the following years, if the borrowers continue to be good ones.
Besides, the good borrowers will be eligible for getting an enhanced credit facility to meet their requirements, it has added.
The borrowers will not be considered as good ones, if any loan of his or her affiliated business entities are identified as classified in previous three years.
"It will help increase profitability of banks and the liquidity position will develop," Deputy Governor of Bangladesh Bank (BB) SK Sur Chowdhury told the FE.
He also said the good borrower would be able to get an enhanced credit facility in line with the policy.
The central bank has offered such incentives to good borrowers after announcing a large loan restructuring policy to benefit big borrowers who were struggling to repay their bank loans.
Earlier on January 29 last the BB announced the policy on large loan restructuring allowing loan rescheduling, only if the business entities are hit by global or domestic shocks.
Borrowers of outstanding bank loans worth minimum Tk 5.0 billion can now take maximum 12 years to repay the money in case of term credits under the new policy on large loan restructuring.
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