Defaulters with down payment will not be classified too

Loan defaulters who availed loan rescheduling with 2% down payment and one-time exit facility in 2019 will not be classified if they fail to pay the installments this year.

The central bank's Banking Regulation and Policy Division (BRPD) issued a circular Wednesday in this regard.

The central bank in May 2019 allowed defaulters to regularise their bad loans with 2% down payment and offered a "one time exit" by clearing all dues by 360 days.

According to the latest circular, the loan classification facility on those defaulters will be applicable on installment failure in 1 January 2020 to 31 December 2020 – considering the coronavirus fallout on business.

In the 2019 circular, the central bank said clients whose loans have gone bad on 31 December 2018 will qualify for rescheduling with 2% down payment and one time exit.

The central bank then allowed the defaulters a 10-year repayment period with 9% interest. The circular referred to the bank-client relationship in implementing the facility. According to the circular, a bank could waive the interest before loan rescheduling if it wished.

The special facility said defaulters who would reschedule loans or repay the dues at one go would also qualify for new loans.

According to the latest central bank estimation, the total defaulted loans stood at Tk94,440 crore at the end of September this year, which is 8.88% of the total loans disbursed.