Banks demand guarantees against loan

Managing Directors of state-owned banks have sought guarantee from the Bangladesh Bank (BB) against loans given to pandemic-hit businesses under state announced incentive packages.

Managing Director and CEO of the State Commercial banks, specialized banks, and the government-run financial institutions placed their demands during an online video conference on Thursday (May 7).

Senior Secretary of Financial Institutions Division Md Ashraful Islam presided over that online meeting which was also attended by Bangladesh Bank Governor Fazle Kabir.

On condition of anonymity managing directors of state-owned banks attending the meeting said, banks put provision money to Bangladesh Bank against the loan they give to their client. Therefore, they now want guarantee of their money from the BB while giving loans to coronavirus-hit businesses.

Bangladesh Bank Governor asked the banks to submit their proposal on the necessary guarantees.

Former MD of Meghna Bank Nurul Amin said managements of state-owned banks do not believe in any verbal promises as the Bangladesh Bank allowed rescheduling of default loans of big companies in 2015 and 2018.