Deadline extended for defaulting tanners to apply for special facilities
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January 30, 2023

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MONDAY, JANUARY 30, 2023
Deadline extended for defaulting tanners to apply for special facilities

Industry

TBS Report
12 April, 2021, 09:55 pm
Last modified: 12 April, 2021, 10:19 pm

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Deadline extended for defaulting tanners to apply for special facilities

The deadline has been extended due to fears that traders could again face loss because of the second wave of Covid-19

TBS Report
12 April, 2021, 09:55 pm
Last modified: 12 April, 2021, 10:19 pm
Photo shows a tannery worker preparing rawhide. Photo: Mumit M
Photo shows a tannery worker preparing rawhide. Photo: Mumit M

The Bangladesh Bank has extended the application deadline to avail the special facility of repaying loan with a 2% down payment till 30 June, for defaulting owners of tanneries shifted to the leather industrial city at Savar.

The Banking Regulation and Policy Department (BRPD) of the central bank issued a circular in this regard on Monday. The previous deadline was 31 March.

The bank said the application deadline has been extended due to fears that traders could again face loss because of the second wave of Covid-19.

Earlier, on 6 January this year, the central bank issued a circular to provide the special facility to tannery owners in the leather industrial city of Savar.

According to the circular, owners of tanneries that are unable to continue their business will be able to repay their entire loan with a 2% down payment. In addition, interest on the loan will also be waived.

Meanwhile, the tannery owners who are able to continue their business will be given the facility to reschedule or restructure the loan.

The circular stated, the tannery owners who have shifted to the leather industrial city of Savar have suffered losses due to various reasons and many of them have not been able to repay their loans regularly, which has turned into bad debts.

Because of this, it is not possible to maintain normal credit flow in the leather industry in many cases. In order to overcome the situation, five types of benefits have been given to the factory owners who cannot continue their business, it added.

The circular continued, tannery owners who had a debt of Tk5 crore on 31 December 2020 will be able to repay the principal loan within three years with a 2% down payment of the loan status.

At the same time, those who have a debt of more than Tk5 crore will get 5 years to repay the original loan with the same amount of down payment.

Moreover, interest, penalty interest, and uncharged interest can be waived on the basis of bank-customer relationship subject to compliance with existing laws.

For those who want to make an exit from the business, the bank will be able to sell their property kept in the bank as collateral with the consent of the customer.

On the other hand, tannery owners who are able to continue their business will also have the facility to reschedule or restructure the loan for a maximum of 10 years, along with a grace period of one year and the benefit of interest waiver.

After availing this facility, the interest rate of the defaulted loan will be 9%.

Interest, penalty interest, uncharged interest can be waived for them as well. However, the original debt will not be waived.

Those who have availed loan rescheduling or restructuring facilities earlier will also be covered under this circular. But, this benefit will not be available in case of default through fraud or forgery.

After availing this facility, if any customer fails to pay six installments or two quarterly installments per month, the facility will be canceled.

Besides, the installments that have been paid before applying for the benefit will not be considered as a down payment.

Ongoing cases can be settled on the basis of solenama while availing benefits under the circular. However, if any customer violates any conditions, all the benefits will be canceled and the suspended case will be revived.

Economy / Top News

Tannery owners / Bangladesh Bank / loan

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