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BB relaxes loan repayment rules also for NBFI borrowers

Published : Thursday, 30 June, 2022 at 12:00 AM  Count : 108
Business Correspondent

The Bangladesh Bank (BB) relaxed loan repayment and classification rules for the borrowers of non-bank financial institutions (NBFI) for 2022.
The BB offered the relaxation amid a recent surge in Covid infections and flooding in the country's northern and western areas, said a BB circular.
Under the relaxed payment rules, the BB allowed the NBFI borrowers to keep their loans unclassified by paying 50 per cent of their overdue loans of a particular quarter within the quarter.
Only the actually affected customers would get deferred payment scope based on NBFI customer relationship, said the BB.
For the flood-affected areas identified by the disaster management and relief ministry, the NBFI borrowers will get the same deferred payment scope along with relaxed loan classification facility. However, the NBFIs will have to be certain that the borrowers were really affected by the floods.
Besides, the BB also barred the NBFIs from slapping any penalty or additional interest on the borrowers receiving the relaxed payment and loan classification facility for the period ranging between January 1 and December 31 of 2022.
If any borrower fails to pay the stipulated amount within the particular quarter as specified by the BB, the NBFIs will revoke the relaxed payment and classification facility of the borrowers and report the Credit Information Bureau the matter accordingly.
In regards to the realisation of interest income, the central bank allowed the NBFIs to realise interest income upon an actual recovery from the customers. The instruction was issued as per section 18 of the Financial Institutions Act, 1993, making it effective from June 28.
On June 22, the BB issued easy loan repayment and classification scope for the businesses and farmers who borrowed money from banks. The BB offered the scope following proposals made by the Federation of Bangladesh Chambers of Commerce and Industry as the Covid-induced long-term effect, recent increase in Covid infection cases, flooding in northern and western areas in the country, increase in prices of raw materials amid war outside the country and subsequent hike in shipment cost have made it difficult for the borrowers to repay loans in full.
Prompted by the situation, the BB issued a set of guidelines, allowing easy loan repayment facility for large industries, cottage, micro, small and medium entrepreneurs (CMSME) and for farmers.
As per the BB circular, large industries will be considered as regular borrowers if the entities clear 50 per cent of their overdue amount for the April-June quarter by June, 60 per cent of the overdue amount for July-September quarter by September and 75 per cent of their overdue amount for the October-December quarter by December of 2022.
For the CMSME borrowers, the payment at the end of June, September and December of 2022 was set at 25 per cent, 30 per cent and 40 per cent respectively against the borrowers' outstanding loans.
The remaining amount of the overdue loans of the borrowers will be recoverable from the borrowers in one year after the end of tenure of the loans. Only the borrowers with unclassified loans as of April 1 will be entitled to avail the relaxed loan classification scope.
The agriculture loans disbursed in the country's northern and western flood-affected districts cannot be classified as bad loans even if the borrowers fail to pay due instalments for the April-December period, the central bank said.

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