FE REPORT |
Jun 17, 2022 9:14:55 a.m.
June 18, 2022 8:36:18 PM
Bangladesh’s top bankers are suggesting the central bank consider FBCCI’s request for a loan repayment moratorium until December selectively and conditionally, as they cite some deliberate defaults.
Following a meeting between the Governor of the Bangladesh Bank and the banks’ top brass and chief executives on Thursday, BB spokesman Md. Sirajul Islam said the issue was discussed in detail during of the meeting, but that no final decision had been made.
“There were mixed reactions among bankers on the issue, but most bankers said there shouldn’t be a full opportunity,” he said in an interview with reporters. in his office in Dhaka after the banking summit.
“Bankers made observations that after the moratorium was extended for two years, they noticed that even unaffected sectors and good customers were not repaying the loan,” he said.
The spokesperson said bankers were of the view that such a general opportunity would also discourage loyal and regular customers.
“Top bankers also said that borrowers did not take advantage of the classification relaxation policy by paying 15% of the total tranche of loans payable in 2021 instead of the previous 25%,” he said. said, adding that the decision to postpone the loan will be taken after examining the actual situation.
The BB official said the central bank would make its decision taking into account the interests of all parties – bankers, businesses and the country as a whole.
The chairman of the Association of Bankers, Bangladesh Limited, Selim RF Hussain, also told reporters that the matter had been discussed in detail.
However, he did not want to elaborate on the matter of great financial importance.
Companies in Bangladesh are calling for a loan moratorium until December this year due to the “volatile” business climate around the world amid war in Europe and the resulting stalemate in the West.
The country’s apex trade body, the Federation of Bangladesh Chambers of Commerce and Industry, has placed the request on Mat 31, in a set of economic recovery recommendations, with the central bank as its leaders fear the specter another economic “recession”.
Earlier on December 30, 2021, the central bank relaxed its loan classification policy for all borrowers following a request from the FBCCI.
In accordance with the relaxation, a borrower was not considered to be in default if he paid 15% of the total amount of loans payable in 2021 instead of the previous 25%.
In August 2021, the Bangladesh Bank had extended the loan repayment facility under relaxed terms until December 31, 2021.
The facility was first introduced in March 2020 amid the Covid pandemic allowing all borrowers to avoid having their loans classified.
Under the policy, banks were barred from treating any loan as substandard if borrowers paid 25% of dues for the months of January to December of the year 2021.
However, the BB spokesperson said the issue of loan recovery was also discussed at the meeting.
“BB Governor Fazle Kabir has urged bankers to speed up the process of recovering loans, especially those already pending in court,” the BB spokesperson said.
After the meeting, ABB’s chairman said that the volume of NPLs has been increasing lately. “The accelerated loan recovery process would certainly reduce the rise in bad debts.”
He also said that the formulation of a rapid loan recovery team was discussed at the meeting, as well as the establishment of an exclusive club and hospital for bankers.