The Bangladesh Bank has extended the exemption period for borrowers of non-bank financial institutions (NBFIs) by June this year.
But not all borrowers will get this facility. The borrowers who are unable to repay instalments of March this year under the pandemic impact will get the three-more month time to pay back their due loan instalments based on the NBFI-customer relations, according to a notification issued by the central bank on Tuesday.
Under the deferral facility, NBFIs cannot classify loans for non-payment of instalments by the borrowers between 1 March and 30 June. Besides, they have been stopped from imposing any kind of extra fee, penalty or commission on the borrowers against the overdue loan instalments.
Over the past year, customers of banks as well as NBFIs have not had to repay loan instalments under the deferment facility and they have defaulted on loans. On 24 March, the central bank further relaxed repayments of bank loans for its customers. And about a month later, the announcement of the repayment deferral facility has come for NBFI customers as well.
When contacted, Md Kyser Hamid, managing director and chief executive officer of BD Finance, told The Standard that the customers who failed to repay their instalments of March will get time until June. Their loans will not be classified during the time.
"But while giving this deferral facility, we check their previous record in loan repayments. Only the good borrowers will definitely enjoy this facility. That is why the central bank in its directive has mentioned a good relationship between an NBFI and its customers for offering the loan exemption facility," he added.
Stating the central bank's directive a timely one, he said there are some common customers of financial institutions - they are clients of both banks and NBFIs. The same customers will get the payment pause facility from banks, but there will arise problems if they become defaulters of NBFIs.
Many customers are finding it difficult to repay loans on time because of the resurgence of Covid-19. Kyser said the loan recovery rate has decreased significantly. So, this regulatory forbearance for NBFI clients is very positive under this situation.
When asked whether the time extension for exemption from loan repayment has come a bit late, he said the decision has come on time as the types of business in banks and financial institutions are different.
On 24 March, the central bank extended the time for exemption from repaying instalments for borrowers of banks. Around a month later, an announcement was made in terms of NBFIs.
The borrowers got facilities based on types of loans instead of getting a similar advantage.
The Bangladesh Bank relaxed repayments of loans taken as working capital to counter ongoing pandemic impacts, extending the time until June 2022 if borrowers regularly pay interests.
The central bank also eased repayments of term loans and demand loans.
Borrowers of demand loans will have time till December 2022 to repay. In the case of term loans, a borrower will be allowed to pay deferred instalments till 30 June this year. The term loan facility will be available only on the basis of bank-customer relationship.