No more applications for special loan rescheduling

Banks are not allowed to receive any more applications from loan defaulters under the "Special Policy on Loan Rescheduling and One Time Exit," according to a circular of the Bangladesh Bank on Wednesday.

Applications submitted till October 20 will have to be settled by November 19 or the date fixed after disposal of the writ petition filed with the High Court, said the central bank circular.  

The circular has already been sent to chief executives of all the banks.

Under a special arrangement, the Bangladesh Bank earlier allowed defaulters to regularise their loans for 10 years by paying a two percent down payment instead of the existing 10 to 15 percent. 

To get special facilities for rescheduling loans, about 4,000 applications were submitted to the banks until October 20. 

Most of the applications for this facility were received by state-owned banks, whereas the private ones were not showing any interest in offering the facility. 

Among the public banks, the defaulters submitted most applications to the Janata, Sonali and BASIC banks, said sources. The default loans in these banks are also high.  

Till last December, default loans at Janata Bank stood at Tk20,995 crore, Tk12,165 crore at Sonali Bank, and Tk9,114 crore at BASIC Bank, according to central bank data.

The sources said that 700 corporate groups and individuals applied to Janata Bank for loan rescheduling under the special privilege.

However, Crescent Group, one of the top loan defaulters of Janata Bank, did not apply for this facility. The company's default loan to the bank was Tk2,187 crore as of last December.

Besides, 1,200 applications were submitted to Sonali Bank, 550 to BASIC Bank, 320 to Agrani Bank and 280 to Rupali Bank.

On October 20, a High Court bench said the defaulters would not be allowed to get further loans by depositing two percent down payment of the total loan amount.

The court issued the order following a petition filed by the Human Rights and Peace for Bangladesh.

Earlier, on May 16, the Bangladesh Bank issued a circular giving a special loan rescheduling facility. Defaulters were asked to apply within 90 days from the date of the circular.

After that, the central bank extended the time period two more times, which expired on October 20.