Rawhide traders get extension for loan rescheduling till Oct 29

The Bangladesh Bank has extended the time for rescheduling loans of the tannery sector by three months – from July 30 to October 29.

Rawhide traders can apply for loan rescheduling till October 29, read a circular of the central bank issued on Sunday.

Earlier, on July 5, the central bank relaxed the loan rescheduling rules for rawhide traders to facilitate the industry with sufficient funds during Eid-ul-Adha.

According to the relaxed policy, traders will be allowed to reschedule their default loans after paying only a two percent down payment on outstanding loans as of June 30.

After regularising loans, borrowers can enjoy a renewed repayment tenure of up to six years, including a one-year grace period.

Clients who took term loans will be given a maximum of eight years, including the one-year grace period. Traders will have to send in their applications by July 30 to quality for the relaxed facilities.

Clients will have to pay back at least 15 percent of their outstanding loans after rescheduling their non-performing loans if they want to secure further funding.

The central bank's move came after rawhide traders were denied loans after applying for Tk600 crore from banks.

As a result of the central bank's decision, apart from rescheduling their existing default loans, tannery owners will be able to borrow at five percent interest from a package of Tk30,000 crore announced for the industry and service sectors.

Every year before Eid-ul-Adha, tannery owners get loans for a period of 180 days. Again, they can only take the amount they repay the following year.

The central bank has informed the banks that the conditions of accepting compromised amounts for giving new loans can be relaxed so that they can get more this year.

The government has set a target to rake in $5 billion in export earnings from the leather sector by 2022.