Loan moratorium extended until 15 Jan – informally

Borrowers have until 15 January to avoid being classified as loan defaulters by paying at least 15% of their instalments for 2021.

Earlier, the Bangladesh Bank asked them to pay the minimum amount within 31 December 2021, otherwise, they would be categorised as loan defaulters – a negative marking for which they would face barriers in getting loans and availing other facilities in future.

The Banking Regulation and Policy Department of the central bank on Monday, informally instructed banks about the extension of the moratorium – so that they can realise the highest amount of loan repayment and minimise the number of defaulters, officials familiar with the matter told The Business Standard.

The officials did not want to be named as the central bank did not issue any circular in this regard.

The Bangladesh Bank on 30 December set a loan moratorium facility for all borrowers at 15% of their total repayable loans in 2021, backtracking from its earlier decision of 25% for large borrowers, in the face of pressure from businessmen and bank owners.

The decision was made at a meeting between the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the Bangladesh Association of Banks (BAB) with the central bank governor.

Earlier on 14 December, the central bank issued a circular that says borrowers under the loan moratorium facility will not be considered defaulters if they pay 25% of the payable amount for the year.

Later, business associations demand a further relaxation of the loan moratorium facility. 

Following their demand, the central bank held a meeting on 28 December with bankers and decided to allow small borrowers to pay 15%.

"The Bangladesh Bank has now orally extended the moratorium facility by 15 days as the written deadline 31 December could generate a number of new defaulters," said a managing director of a state-owned bank, who received the guideline.

Wishing to remain unnamed, he told The Business Standard, "The central bank informed all banks [about the facility] what to do, how to do, and when to do.

"Usually, we submit the list of loan defaulters within 20 days after the fiscal quarters' end. This time borrowers who will pay by 15 January would not be placed on the list."

When asked about this, Bangladesh Bank Executive Director Md Serajul Islam told The Business Standard that he was not aware of the 15-day extension.

"I cannot talk on the issues beyond the official circular.

"Banks, however, can inform us with a note if any borrower pays a week later," he added.