No more loan moratorium for borrowers
However, CMSMEs can avail the facility by paying only 15% until December this year
The Bangladesh Bank has decided not to extend the loan moratorium facility for the borrowers any longer as the economy is bouncing back from the Covid-19-induced fallouts.
The central bank in a meeting with the managing directors of scheduled banks on Tuesday came up with the decision, officials familiar with the matter said.
"Scheduled banks have been failing to realise loans for a long time amid the Covid-19 pandemic. Now, the Covid-19 situation has normalised and economic activities have resumed. In such a situation, we decided not to provide the moratorium facility anymore for large borrowers so that the banks can grow up further," Serajul Islam, executive director at the Bangladesh Bank, told The Business Standard.
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"However, cottage, micro, small and medium entrepreneurs (CMSMEs) can avail the moratorium facility by paying only 15% of their loans until December this year. But they will have to keep additional 1.5% provisioning," he said, adding that they would issue a notice in this regard soon.
The central bank in mid-2020 provided the loan moratorium facility – allowing the borrowers a grace period for loan repayment – as the pandemic took a toll on businesses. It later extended the facility in several phases to December 2021. However, in January this year, the borrowers were ordered to pay at least 25% of their total loans and the rule continued till this month.
Subsequently, the Bangladesh Bank on 14 December provided a mega discount for banks, allowing them to show unrealised interest incomes as profits.
Soon after the notice, the country's apex trade body Federation of Bangladesh Chambers of Commerce and Industries sent a letter to the Bangladesh Bank and requested it to extend the moratorium facility for further 6 months (until June 2022) without any condition so that the large borrowers' loans cannot be classified.
FBCCI President Jashim Uddin in the letter said the extension would help them revive as well as the economy recover.
Bangladesh Bank Governor Fazle Kabir presided over the meeting in which other senior officials were also present. In the event, a total of 13 banks, and four non-bank financial institutions have been recognised for their achievement in disbursing stimulus packages to CMSMEs.
The awardees are United Commercial Bank, Brac Bank, Agrani Bank, Uttara Bank, Premier Bank, Bank Asia, Mutual Trust Bank, Eastern Bank, Prime Bank, Bangladesh Krishi Bank, Rajshahi Krishi Bank, Commercial Bank of Ceylon, IDLC Finance, LankaBangla Finance, IPDC Finance, and United Finance.
The BB governor instructed all the lenders to enhance their efforts to disburse loans to the CMSMEs under the stimulus package announced by Prime Minister Sheikh Hasina.
