The central bank has extended the same opportunity to financial institutions as the ones given to banks by allowing borrowers to repay 50% of the instalment payable on a quarterly basis and avoid the defaulter status.
The facility has been given till 31 December, said a directive issued by the Financial Institutions and Markets Department of Bangladesh Bank on Tuesday.
According to the circular, under this facility, from April 1 to December 31 of this year, any kind of loan penalty, interest or additional charges will be levied.
Within the last working day of every three months, however, a customer has to pay the amount as per the payment policy.
Failure to do so will result in regular classification and report to the CIB.
Besides, in the case of agricultural loans and CMSMEs in flood-hit districts, 50% of the loans repayable in quarterly instalments this year cannot be defaulted.
But the customer must prove that they were damaged by floods, otherwise it will result in regular classification.
Customers were freed of the regular classification if they have paid at least 25% of the repayable loan in 2021. In addition, customers were released from default status without paying any amount in the previous year 2020.
Earlier on June 23, borrowers were given time till December this year to avoid their loans being classified as defaulted by paying 25-75% of their instalments for 2022.
The Bangladesh Bank recently issued a circular, extending the loan moratorium facility for all borrowers.
Under the new facility, large industrial borrowers are allowed to repay their term loans, which became unclassified on 1 April, in phases – 50% by June, 60% in July-September, and 75% from October to December – without becoming a defaulter.
The remaining amount will have to be repaid in the same instalment of one year after the expiry of the loan period.
Islamic banks are also asked to follow the same policy in their investments.
The central bank will later issue instructions on the interest/profit of the beneficiary loan.
In addition, unclassified term loans disbursed to cottage, micro, small and medium enterprises (CMSMEs) and agricultural sector cannot be classified if 25% of a loan is repaid from April to June, 30% in July-September, and at least 40% in October-December of this year.
Besides, the demand loans of large-scale industry, CMSME and agriculture sectors, which became unclassified as of 1 April, cannot be shown as default if those are repaid in 3 instalments by December.