State banks seek to reschedule default loans under stay orders
The central bank officials assured them of considering their proposal after getting opinions from legal experts in this regard
The state-owned banks want a scope to reschedule defaulted loans of clients whose defaulter status is stayed by the High Court.
Officials of the banks placed their proposal at a meeting with the Bangladesh Bank on Wednesday.
The central bank officials assured them of considering their proposal after getting opinions from legal experts in this regard.
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Bangladesh Bank's Executive Director Md Serajul Islam told The Business Standard, "As per the discussion at the meeting, the central bank will consider providing them with the scope after getting opinions from its legal advisers."
A borrower cannot be treated as a defaulter if they can secure a court's stay order on the status.
As per the rule, those borrowers are not eligible to avail the recently given special facilities of rescheduling default loans with at least 2 percent down payment.
In the banking sector, around Tk89,000 crore default loans remain stayed by court orders, of which Tk30,000 crore are with the state-owned banks.
As per a circular of the Bangladesh Bank issued in May 2019, banks can reschedule loans that were classified as bad loans by December 2018.
Now the borrowers of the loans that are covered by stay orders want to enjoy the rescheduling facilities under which the down payment is much lower and interest rate is maximum 9 percent.
The central bank data shows that till December 2019, 4,092 borrowers of state-owned banks have already received the rescheduling facility.
And 2,540 borrowers got their loans rescheduled from private banks.
A total 13,338 default borrowers applied for the facilities.
At yesterday's meeting, state bank officials sought an opportunity to allow banks to reschedule those loans which have already been written off.
In reply, the central bank told the state banks to follow the directive stated in the main circular on writing-off loans, which clearly described that banks can make a payment schedule for the written-off loans but those borrowers will not be eligible for fresh loans.
