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The Bangladesh Bank says it has expanded default loan rescheduling facilities considering the ongoing economic situation and not under the pressure of any group.
Its Executive Director and Spokesperson Serajul Islam told a press briefing on Tuesday the new facilities had given bank boards more responsibilities instead of empowering them.
“Banks earlier were less responsible as defaulters could reschedule with the central bank’s clearance. Now they have to be more accountable and liable,” he said.
The Bangladesh Bank has allowed defaulters to reschedule their loans up to four times under special consideration while the repayment period will be a maximum of eight years.
As part of this, bank boards will now provide defaulters with rescheduling facilities. Earlier, only the central bank had this power.
Serajul said the central bank wants to fully focus on regulatory work from now on while reducing the load of operational tasks, such as approving loan rescheduling.
“From now on, the central bank will inspect whether banks are rescheduling loans properly. Our inspection team will extend their duties,” he added.
Journalists said there were possibilities that bank directors would collude with each other to reschedule their loans now as their loans had exceeded Tk 1 lakh crore.
Ruling this out, Serajul said bank directors would have to take the central bank’s approval to reschedule their loans as per the bank company act.
The regulatory body hopes the new move will help reduce default loans in the banking sector, he added.
He further said the new facilities had been provided to maintain stability in the financial sector and properly manage classified loans in light of the long-term impacts of the pandemic, the global economic instability, and the upward trend in Covid-19 infections.
