Home ›› 10 May 2020 ›› World Biz
Bangladesh Bank has asked the banks to give information about their loss due to suspension of charging loan interest for two months against the backdrop of coronavirus pandemic.
The banks are claiming that the BB decision will reduce their income by Tk 1,500 crore in April and May.
The central bank on Sunday sent to a letter to the banks seeking information on how the banks will lose the money for the suspension of interest. After disseminating the information, the Bangladesh Bank will take the next decision regarding the suspension.
The letter also reads, the amount of interest suspended in April by bank should be informed in a certain format by May 14 while the amount of interest suspended in May must be reported by June 6 to Bangladesh Bank.
The central bank has a format attached with letters for sending information.
According to a circular issued on May 3, interest on all loans will be suspended from April 1 to May 31. The interest of this period will be kept by the banks in interest-free ‘blocked account’.
This interest cannot be shown as income until further notice. This applies to all loans up to 31st March.
It is to be noted that the loan amount of national commercial bank is Tk10 lakh 57 thousand crore.
No interest on this loan can be charged in these months.
However, banks will be able to collect interest on new loans or loans disbursed after April 1.
Syed Mahbubur Rahman, former president of the Association of Bankers Bangladesh (ABB), an association of chief executives of commercial banks, and MD of Mutual Trust Bank, told Business Post the interest rate on all loans has been fixed at 9% since April 1 as part of single-digit interest rate policy.
As a result, the income of the banks has come under a lot of pressure. Now, the interest rate has been suspended for two months, the income of the banks will be less by Tk 8,000 crore every month, he said adding that now it remains to be seen how the BB will adjust it.
ask/wi
