Home ›› 18 Aug 2021 ›› Front
The Federation of Bangladesh Chambers of Commerce and Industry has requested the Bangladesh Bank for further extending the ongoing loan moratorium facility until December 31, 2021 as the ongoing moratorium will come to an end on August 31.
The country’s apex trade body on August 5 sent a letter to the Bangladesh Bank Governor Fazle kabir to extend the existing time for non-classification of loans by two more months until December 31, to help businesses ride out the storm of the Covid-19 pandemic.
Earlier, the central bank had extended the loan moratorium facility several times considering the request of several business organisations including the FBCCI, BGMEA and BKMEA.
During the last time in June, the central bank had extended the facility for two more months till August 31 by imposing a condition.
Under the condition, 20 per cent of the loan installments, which were payable till June has to be repaid during the two months depending on the bankers-customer relationship.
This time, the FBCCI has also requested the Bangladesh Bank to withdraw such a condition.
Not only the FBCCI, but also a number of trade organisations including the Bangladesh Cement Manufacturers Association have requested the BB to extend the existing time for non-classification of loans, said a BB high official on condition of anonymity.
The BB official also said that the central bank is yet to make any decision about such a request for further extending the ongoing loan moratorium.
“The ongoing Covid-19 pandemic has created uncertainty in the national economy,’” said the FBCCI president Jashim Uddin in his written letter to the BB.
“Overall economic activities have stagnated as most of the industrial and commercial establishments were closed due to the lockdowns, which were withdrawn recently,” reads the letter.
In this difficult situation, industrial units and businesses are not able to repay their loans installments on time, said the letter.
“If the duration of the ongoing loan moratorium facility is not extended, most of the businesses will unintentionally become defaulters, which will put a negative impact on the country’s entire economy including the banking sector.”
Previously, the central bank had allowed rescheduling the client’s loans without any down payments to prevent the adverse impacts on business, trade and economic activities owing to the natural climates, political instability, reminds Jashim Uddin in his letter adding that such a facility should be given even now in the present context.
“To fight the economic fallout of Covid-19 pandemic and recovery, the Bangladesh Bank gave us an opportunity through a moratorium. It helped us to some extent in remaining afloat amid the ongoing pandemic,” said Dhaka Chamber of Commerce and Industry president Rizwan Rahman while talking to The Business Post.
As the pandemic is not yet over and even no one knows when it will be over. In such a given context, a one-year period is not good enough to turnaround, said Rahman. Since the economy just started to recover slowly and in helping the business people to recover fast, the central bank should extend the facilities at least for three years, he added.
However, the bankers have opposed the request of FBCCI.
“The moratorium on loan installments should not be extended in any way, said three chief executives of three private commercial banks seeking anonymity.
Businesses and traders have shown various excuses due to the lockdown but the economy is now reopened in full swing, they said further adding that if they cannot receive payments, how the banks will run and survive.
“It is a baseless proposal from the country’s apex trade body.”
Business and traders enjoyed the moratorium on loans installments throughout the last year. As a result, the borrowers were relieved from default without paying any installments of loans.
The gross non-performing loans in the banking sector decreased by Tk 6,050 crore from calendar year 2019 to reach Tk 88,280 crore in the CY 2020 due to such a facility.
