BB offers special facility for term loan repayment

Staff Reporter :
Bangladesh Bank (BB) has offered another special facility in the repayment of term loan (industrial loan) for the last quarter (October-December) of this year, in a bid to reduce classified loan in the country’s banking sector.
The Banking Regulation and Policy Department (BRPD) of BB issued a circular in this regard yesterday, and sent it to all top executives of the banks for immediate execution.
“If half of the loan installments (50 per cent) are paid by December, of the last quarter of this year, the loans would not be marked as “classified,” according to the circular.
Earlier, minimum 75 per cent of a loan installment had to be paid to avoid being declared “classified”.
The circular mentioned that the cost of production in the industrial sector has increased due to the prolonged Russia-Ukraine war situation. As a result, the real income of the borrowers has decreased.
“Considering the fact, the central bank has relaxed loan repayment to make it easier for the borrowers to pay the loan installments and keep the economic activities of the country dynamic,” it added.
The circular further stated that the installments or unpaid portion of the installments due from April to December, 2022 of the term loans will be payable in equal installments (monthly and quarterly) within 1 year after the expiry of the predetermined period of the existing loan.
However, on the basis of the banker-customer relationship, installments can be rescheduled and collected as per the new schedule, taking into consideration the remaining tenure and extended 1-year period.
Besides, other instructions of earlier circulars in this regard will remain unchanged.
At present, the banking sector has a record amount of defaulted loans of Tk 1.34 lakh crore, which is 9.36 per cent of the total outstanding debt.