Default loan for buying rawhide can be rescheduled at a 2% down payment

Defaulted loans that were taken for purchasing sacrificial animal skins can be rescheduled if the borrower makes a down payment of 2% of the outstanding debt, said the central bank.

In a circular issued yesterday, the Bangladesh Bank said the loans can be rescheduled on the basis of the relationship between the bank and the customer. Besides, the banks will be able to grant new loans to these customers after rescheduling their defaulted loans.

For rescheduling a loan, the borrower must have stocks or collateral in their warehouses, said the central bank.

However, no compromised amount can be taken in case of granting a new loan for purchasing rawhide.

At the same time, the banks should make efforts to reach out to those involved in buying and selling rawhide at the grassroots level by ensuring fair distribution of loans allocated for this purchase. Shariah-based banks will be able to invest in this sector by following these policies, said the circular.

According to a senior official of the Bangladesh Bank, in order to take a loan in general, the customer has to deposit a part of the loan in advance with the bank, which is called the compromised amount. No such deposit is required for the loans taken for the purpose of buying rawhide.

Noting that the amount of loans taken for the purpose of buying rawhide is not very high, the official said some of the loans taken earlier have defaulted due to the Covid-19 and various problems in the leather industry.

"The decision to reschedule these defaulted loans has been taken in view of the recent increase in transmission of Covid-19, the global war situation and the recent flash floods in several parts of the country," he said.