Loan Instalment Payment

NBFIs’ borrowers get three more months

Staff Correspondent | Published: 22:40, Apr 20,2021

 
 

Borrowers of non-bank financial institutions would get three more months till June 30 to pay loan instalments which they were supposed to pay by March 31.

The Bangladesh Bank on Tuesday issued a circular in this regard for the borrowers of the NBFIs who would not be able to pay their due installments due to financial hardships resulting from the Covid-19 outbreak.

The BB said that the loans of the NBFIs’ borrowers could not be classified as default if the borrowers cleared their Marchend due instalments within June 30, 2021.

The circular also said that the NBFIs would not be allowed to impose any penalty, additional interest or fines on the borrowers in calculating the interest.

The circular issued by the central bank came within one week of the imposition of countrywide movement restrictions to contain the spike of Covid-19 infections and deaths.

In 2020, the central bank barred the downgrading of loans throughout the year 2020 for the borrowers of banks as well as the NBFIs to save businesses and individuals from Covidinduced economic shocks.

The banks and the NBFIs were also asked to increase equally the number of instalments which the borrowers did not pay in 2020.

Monday’s circular was issued as per Section 18 of the Financial Institutions Act, 1993.

The relaxation would not only benefit the borrowers but also help to save the NBFIs from maintaining additional provision against the loans which have turned defaulted at the Marchend quarter.

Around one fourth of the 34 NBFIs in the country had been going through intense crises in recent years amid massive irregularities and misappropriation of funds.

As a result, the government was left with no other alternative but to liquidate the scam-hit People’s Leasing and Financial Services Limited.

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