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No more loan moratorium for large borrowers

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The Bangladesh Bank has decided to no longer extend the loan moratorium facility for large borrowers as the economy recovers from the fallout from Covid-19.

The central bank in a meeting with bank chiefs scheduled for Tuesday made the decision, officials familiar with the matter said.

“Scheduled banks have long failed to make loans amid the Covid-19 pandemic. Now the Covid-19 situation has returned to normal and economic activities have resumed. In such a situation, we have decided to no longer provide the large borrower moratorium facility so that the banks can develop further, ”Serajul Islam, executive director of the Bank of Bangladesh, told The Business Standard.

“However, chalets, micro, small and medium enterprises (CMSME) can take advantage of the moratorium facility by paying only 15% of their loans until next June,” he said, adding that ‘they would soon publish a notice in this regard.

In mid-2020, the central bank provided the loan moratorium facility – allowing borrowers a grace period for loan repayments – as the pandemic wreaked havoc on businesses. He then extended the facility in stages until December 2021. However, in January of this year, borrowers were ordered to pay at least 25% of their total loans and the rule continued until this month. -this.

Subsequently, the Bangladesh Bank granted a mega rebate to banks on December 14, allowing them to display unrealized interest income as profit.

Shortly after the notice, the country’s umbrella trade body, the Bangladesh Federation of Chambers of Commerce and Industry, sent a letter to the Bangladesh Bank asking them to extend the moratorium facility by 6 additional months (until June 2022) without any conditions so that large borrowers’ loans cannot be classified.

In the letter, FBCCI Chairman Jashim Uddin said the extension would help them revive and revive the economy.

Bangladesh Bank Governor Fazle Kabir chaired the meeting, which was attended by other senior officials as well. In this case, a total of 13 banks and four non-bank financial institutions were recognized for their achievements in disbursing stimulus packages to CMSMEs.

The winners 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 Ceylan, IDLC Finance, LankaBangla Finance , PIDC Finance and United Finance.

The BB governor called on all lenders to redouble their efforts to provide loans to CMSMEs as part of the stimulus plan announced by Prime Minister Sheikh Hasina.