Tanners get 3 months more to repay default loans
The cash-strapped tanners have been given three months more to repay their default loans under relaxed facilities.
The Bangladesh Bank took the decision today considering the ongoing business slowdown brought on by the coronavirus pandemic.
Local tanneries, which have been facing the burden of default loans for years, are now allowed to repay their non-performing loans (NPLs) in a relaxed manner by December 30 this year, according to a BB notice.
This is the third time extension for the tanners to provide their default loans under the relaxed facility.
The central bank declared the policy in January saying that the facility would last till March 31.
But, it later extended the deadline several times given the ongoing economic hardship.
Banks are allowed to offer a one-time exit policy with only a 2 per cent down payment to tannery owners who are unable to run businesses amid the current crisis.
The owners, whose bank loans amounted to up to Tk 5 crore as of December 31 last year, will get three years for the exit.
Defaulters with more than Tk 5 crore loans will have a maximum of five years to repay the amount owed.
The tannery owners who are able to run their business will enjoy a rescheduling facility by making a 2 per cent down payment.
Banks are permitted to reschedule the loans for 10 years, which includes a one-year grace period.
Banks can impose a maximum of 9 per cent interest on the rescheduled or restructured loans.
Banks can rebate the interest amount but there is no scope to waive the principal amount.