Tuesday, 28 September, 2021

BB eases loan repayment further

  • Staff Correspondent
  • 29 August, 2021 12:00 AM
  • Print news

Bangladesh Bank has relaxed loan repayment policy again considering recent lockdown due to the COVID-19 pandemic.

The central bank in a notification said the loan cannot be classified if a borrower pays 25 percent of his or her loan installment during the period of January to December 2021.

The central bank’s announcement came in response to a call from the country’s business community.

The borrowers would get four more months to repay installments of all types of loans, including continuous and term loans, said a circular officially issued on Friday by the Banking Regulation and Policy Department.

The circular stated that the remaining 75 percent of the outstanding loans from January 2021 to December 2021 would be payable within one year from the date of expiry of the loans.

 “We have relaxed the loan classification policy further to help the country's business community to overcome the adverse impact of the second wave of pandemic on their businesses,” said Abu Farah Md. Nasser, Deputy Governor of the Bangladesh Bank.

Earlier, the Bangladesh Bank had conditionally repaid the loans till June 30.

At that time, the central bank had said if at least 20 percent of the loan or loan installments were due by June 30, the loan would not be termed as classified.

Then the country’s top business organizations including the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) called for an extension of loan repayment period.

They also requested rescheduling in case of failure to repay the loans.

Meanwhile, the defaulted loans have started to rise recently, despite various concessions not to default.

According to the Bangladesh Bank, the defaulted debt in the banking sector stood at Tk 981.64 billion till June 2021.

The defaulted amount is around 8.14 percent of the total loans disbursed.

The traders benefited from full-time repayment of loans in 2020 due to the coronavirus outbreak. For this reason, no one defaulted at that time for non-repayment of the loan installments.