BB offers facilities to banks

The Bangladesh Bank has relaxed some rules related to loan classification aiming at enhancing the shock-absorbing capacity of banks in the future.

As part of its move, it has allowed banks to transfer their interest or profit to income accounts in the current year by recovering only 25 percent of installments of loans.

However, the banks will have to keep an additional 2 percent provisions against the regular loans after recovering the loans offered in installments, said the central bank in a notice on Tuesday.

If the lenders failed to recover the installments of loans by this year, they would not be enjoyed the facility, it said.

In August this year, the central bank had said borrowers will not be classified as defaulters if they pay 25 percent of their installments by December this year.

Earlier, the moratorium facility was extended till August 31, but that was based on the bank-client relationship.

A high official of the central bank said that the relaxation to maintain the momentum of the ongoing economic activities after the impacts of the second spell of the virus.

The central bank has extended the loan moratorium facility several times since the Covid-19 struck Bangladesh in March last year.

As part of that moratorium, no borrower was classified as a defaulter in 2020. Later, it was extended to August 31, 2021.