As a part of the government's plan to retrieve the Covid-19 pandemic-hit economy, the Bangladesh Bank (BB) has further extended relaxation of its policy regarding repayment of loans by borrowers, who will now get time up to December 31 to repay their outstanding amount of loans.
"Under the fresh order, the borrowers will not be in the defaulter list if they repay a minimum 25 per cent of the total outstanding amount of loans for the whole calendar year within December 31, 2021," said a notification of the central bank on Friday.
While explaining the new order, A BB official said the remaining 75 per cent of the outstanding loans from January 2021 to December 2021 would be payable within one year from the date of expiry of the loans.
Talking to Bangladesh Post, the BB official said the central bank has relaxed the loan classification policy further to help the country's business community to overcome the impact of the second wave of the COVID-19 pandemic on their businesses.
He said the BB will soon issue a separate directive, relating to maintaining provisioning against such loans, by the end of this year.
"This fresh order will be applicable for all types of borrowers, if they repay one-fourth of their total outstanding loans within the stipulated deadline," said the official.
Earlier, country's leading trade bodies Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), Bangladesh Garment Manufacturers and Exporters Association(BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) demanded extension of loan repayment deadline up to December this year to help the business community recover from the impact of the Covid-19 pandemic.
On June 27, the BB relaxed its loan repayment policy, allowing the borrowers to reschedule their outstanding loans by paying a minimum of 20 per cent of March and June quarters within August 31 this year on the basis of the 'banker-customer' relationship.
Bankers said the central bank's latest policy relaxation would help halt the rising trend of non-performing loans (NPLs) by the end of this calendar year.
"The central bank's steps will certainly help keep NPLs at a reasonable level by the end of 2021," said a top official of a private bank.
The number of classified loans in the banking sector increased by nearly 12 per cent to Tk 992.05 billion as of June 30 from Tk 887.34 billion six months earlier, despite providing of policy support by the central bank.
The BB also offered a deferral loan classification facility from January 2020 to December 2020, considering the adverse impact of the Covid-19 pandemic on people and businesses.
