Application deadline extended until July 31

The Bangladesh Bank has extended the deadline for non-bank financial institution (NBFI) defaulters to apply for the exit facility till July 31.

The Department of Financial Institutions and Markets (DFIM) of the central bank issued a circular in this regard on Thursday. The previous deadline expired on April 30.

The circular said NBFIs should resolve the applications submitted during the extension by September 30.

It said after reviewing the applications received by the DFIM, it was seen that many clients were unable to apply for exit facility as the previous deadline expired, although they wanted to adjust their bad loans. That is why the deadline has been extended.

The central bank earlier offered the exit facility to NBFI clients through a circular on February 15 this year.

The circular said the facility can be sought for the loans classified as bad/loss ones till December 31 last year, adding such loans could be repaid with a minimum down payment of 2 per cent of the total outstanding amount.

Depending on the NBFI-client relationship, loans can be repaid in a maximum of one year from when the exit facility is granted. They have to be repaid in monthly or quarterly instalments.

With the approval of the Board of Directors, NBFIs can waive loan interests (maximum 50 per cent), penalty interests, or any other charges. However, the principal amount of the loan can never be waived.

The central bank said in the February circular that many borrowers were affected due to the negative impacts of Covid-19 on the economy and NBFI loans were thus not being recovered on time.

As a result, loans were being classified, which was hampering the normal debt flow. The exit facility was provided to maintain the normal debt flow, it added.