Tanners to get loan reschedule facility ahead of Eid-ul-Azha

Bangladesh Bank has directed banks to reschedule loans taken by tanners or rawhide traders ahead of upcoming Eid-ul-Azha.

The central bank said that the directive will be implemented subject to a minimum 2% down payment of the customer's loan/investment status in cash.

A circular in this regard has been issued by the Banking Regulation and Policy Department of Bangladesh Bank on Sunday. The circular has been sent to the Managing Directors and Chief Executives of all Scheduled Banks operating in Bangladesh.

Leather industry is a promising sector in terms of national growth, employment, foreign exchange earnings and value addition. About half of the year-round supply of raw materials used in the leather industry comes from animal skins sacrificed every year during the holy Eid al-Azha festival.

But due to various reasons existing loans have not been repaid by tannery owners and some loans are being classified as unfavourable. As a result, it is not possible to maintain normal credit or investment flow in this sector in many cases.

According to the circular, banks will be able to decide on their own on the basis of banker-customer relationship whether to reschedule a minimum 2% down payment of the loan balance based on cash as on June 30, 2020.