Leather merchants may reschedule loans with 2% down payment

Leather merchants who are defaulters will be able to reschedule their loans with a 2 per cent down payment based on the bank-customer relationship, subject to leather stock or collateral, the Bangladesh Bank says.

The central bank’s Banking Regulation and Policy Department in a circular on Thursday said the facility would be effective till August 31 this year.

Following rescheduling, banks will be able to disburse loans for purchasing rawhide of sacrificial animals this year, subject to verification of the borrowers’ eligibility based on appropriate rules, the circular said. It said no compromised amount can be imposed on new loans for purchasing rawhide in 2022.

The facility was given considering the upward trend in Covid-19 infections, the Russia-Ukraine war, and the recent floods in several parts of Bangladesh. The circular said many loans disbursed for purchasing rawhide were classified due to the long-term impacts of the pandemic, including the existing problems in the leather industry.

It also said in the greater national interest, it is necessary to preserve the valuable rawhide of the leather industry and improve the living standards of the marginalised people directly involved in buying and selling rawhide.

Tanners will get bank loans of Tk 400 crore to preserve rawhide during Eid-ul-Azha. The amount is Tk 183 crore less than last year. Earlier, tannery owners wrote to the commerce ministry, requesting it to arrange loans of Tk 500-600 crore for the industry during this Eid-ul-Azha.