SPECIAL LOAN RESCHEDULING

Bangladesh Bank allows banks to decide on pleas received

Staff Correspondent | Published: 00:00, Oct 24,2019

 
 

The Bangladesh Bank on Wednesday allowed banks to take measures regarding the applications for special loan rescheduling and one-time exit facility they have already received from loan defaulters.

However, the banks would not be allowed to receive fresh applications for such facility.

A BB circular issued following a court order said that the banks, however, would be allowed to take measures until the disposal of a writ petition on November 19 this year, whichever comes first.

The banks would not be allowed to accept any fresh application for loan rescheduling or one-time exist under the special Bangladesh Bank circular issued on May 16 this year.

The BB also clarified that none would be allowed to take fresh loan after accepting the facility.

The BB policy offered defaulters to enjoy a 10-year loan repayment tenure including a one-year grace period by paying 2 per cent as down payment.

The bailout for the defaulters, what is seen as a politically motivated move, drew huge criticisms from different quarters and filing of a writ petition with the High Court challenging the government’s move.

Customers of five state-owned banks filed over 3,000 applications for loan rescheduling and one-time exit facility.

Of the SoBs, Sonali Bank received the highest — 1,159 applications — since the introduction of the facility on May 16 this year, as per the data available till October 20.

Janata Bank received 700 applications, Rupali Bank around 400 applications, BASIC Bank 520 applications and Agrani received over 300 applications.

On the other hand, private commercial banks also received hundreds of applications for the facility despite the fact that most of them are reluctant to entertain such facility.

The government has taken the loan rescheduling initiative with a view to reducing defaulted loans that accounted for 11.69 per cent or Tk 1,12,425 crore of the banks’ Tk 6,92,077.26 crore outstanding loans, but the policy drew huge criticisms from different quarters.

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