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Borrowers get relief in repay till December

BB extends tenure for second time

Staff Correspondent | Published: 22:32, Sep 28,2020

 
 

The Bangladesh Bank on Monday asked banks not to change classifications of loans for the borrowers’ failure to repay those for another three months until December 31 this year as many businesses are still struggling for coronavirus outbreak fallout.

With the latest extension, the central bank extended for the second time the timeframe of the facility offered initially for six months ending on June 30 this year.

The BB on Monday issued a circular regarding the matter, asking banks not to downgrade classification of any loan for non-payment of loan instalments during the period.

Earlier on June 15, the BB asked the banks not to alter classifications of loans until September 30.

Officials of the central bank and other commercial banks said that time was yet to come for lifting the facility as the country’s economy still got back the momentum amid the coronavirus outbreak.

However, the banks were instructed to upgrade classification of loans if any borrower manages to repay loans regularly.

As per the BB circular, the borrowers would get loan repayment time extension for the months between January and December in which they would fail to repay.

In the case of demand loans, the borrowers will have to clear their outstanding loans as of September 30, 2020 either by December 31, 2020 or in 12 months whichever comes first.

The borrowers would not be considered as defaulter for their non-payment in the January-December period.

But, the banks were barred from imposing any penalty or additional interest on the loans for the period.

Borrowers can repay loans as it was set earlier or can set alternative options for the adjustment of loans based on bank-client relationship.

Banks can offer rebate to their clients to encourage them to repay the loans.

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