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In a move to facilitate the repayment process and alleviate financial stress in the shipbuilding industry, the Bangladesh Bank has extended the loan rescheduling facility until December 31 of this year.
The decision, outlined in a circular on Monday, aims to support the industry in recovering bad debts and reducing the volume of classified loans.
The circular directs all scheduled banks to offer the extended rescheduling facility, providing relief to customers of the shipbuilding industry who have faced challenges in timely repayment of down payments for various reasons. This extension offers flexibility for down payment repayments until the end of the year.
The shipbuilding sector in Bangladesh is currently grappling with significant challenges, with entrepreneurs struggling to survive amidst a sharp decline in purchase orders.
The industry has been hit by consecutive adverse events, including the impact of the Covid-19 pandemic and the ongoing global economic crisis exacerbated by the Russia-Ukraine war.
These factors have led to a substantial reduction in shipbuilding activities due to a lack of export orders, said industry insiders.
Over the past one and a half decades, shipbuilding has emerged as a promising industry for Bangladesh, primarily driven by the export of locally built ships.
Bangladesh hosts around 200 small and large shipbuilding companies, concentrated in Dhaka, Chattogram, Narayanganj, Barishal, and Khulna.
The Banking Regulation and Policy Department (BRPD) of the central bank had previously issued a directive on June 20, urging all scheduled banks to provide a relaxed loan rescheduling facility for the shipbuilding industry.
This recent extension reflects ongoing efforts to support the sector and navigate the challenges it currently faces.
According to a recent study conducted by the Bangladesh Investment Development Authority (BIDA), the shipbuilding industry contributes significantly to the country's economy, generating approximately Tk 15,000 crore annually.
