Home ›› 13 Apr 2020 ›› World Biz
The loan defaulters will not get financing under the Tk30,000-crore stimulus package that the government earlier announced to help industries and the service sector affected by Covid-19.
Not only the new loan defaulters, but also the old defaulters -- who have rescheduled their loans more than three times -- will not be eligible for the credit facility under the package.
In this regard, the Bangladesh Bank on Sunday issued a guideline with a set of strict conditions.
Earlier, on April 5, Prime Minister Sheikh Hasina announced four stimulus packages of Tk 67,750 crore to overcome the possible economic blow. Of the 67,750 crore, the government will provide working capital of Tk 30,000 crore for the industries and service sector institutions affected by Covid-19.
The loan provided under the package will remain effective for three years. The interest rate of this loan facility will be nine percent -- the loan takers will provide 4.5 percent interest while the government will provide the rest to the respective banks as subsidy. An individual client will enjoy the subsidised loan facility (4.5%) only for the first year.
The loan can only be used for maintaining regular business activities. The facility cannot be used for paying dues and expanding business, reads the central bank circular.
The individual bank will fix its threshold for distributing loan on the basis of advance-deposit ratio (ADR) set by the BB in December 2019, reads the circular.
It also said that the individual bank would be liable for recovering the loan.
The affected clients, who have already borrowed money from banks, will be allowed to take a maximum 30% loan from their existing credit limit.
The fresh borrowers will receive 30% loan of their requirement. The banks will give priority to the most affected borrowers while disbursing the loans.
The BB advised the commercial banks to treat the loans as current capital and realise the subsidy quarterly.
In a separate move, the central bank on Sunday issued a circular raising the banks’ limit of advance-deposit ratio (ADR) to help the corona-hit economy.
The increased lending ceiling will assist the government in implementing various stimulus packages.
According to the BB circular, the ADR of all banks has been increased to 87 per cent from the existing 85 per cent for conventional banks and 92 per cent from the existing 90 per cent for Shariah-based Islamic banks.
The revised limit of ADR will come into effect from April 15.
