The Bangladesh Association of Banks (BAB), a body representing the owners of private banks, on Tuesday requested Bangladesh Bank Governor Fazle Kabir to extend the existing relaxed repayment tenure by three years for term loans.
The loans that carry repayment tenure of more than a year are considered term loans.
The forum also demanded rescheduling of all ongoing loans for three years without any down payment.
Representatives of the forum made the proposals during an emergency meeting with the central bank governor.
The BAB had previously sent a letter to him on February 4, with the same requests.
Nazrul Islam Mazumder, chairman of the BAB, led the delegation while top central bank officials were also present.
The governor assured them that BAB's proposals will be examined, said a central bank official, who attended the meeting.
The BB on January 31 eased the repayment facility for term loans to help borrowers to pay instalments amid pandemic.
The regulatory body allowed banks to extend the tenure of regular term loans by a maximum of 50 per cent of the remaining payment period from January this year, based on bank-customer relationship.
The tenure extension cannot be for more than two years.
However, the loan moratorium facility expired on December 31, 2020 and the BB had decided not to extend it any further.
Following the Covid-19 outbreak in Bangladesh, the central bank on March 19 last year asked banks not to downgrade the classification of any loans for the borrowers’ failure to furnish loan instalments until June 30. That facility has been extended twice, with the lastone being until December 31.
The default loans in the country’s banking sector declined in the third quarter of last year owing to the moratorium facility.
Banks’ balance sheet had Tk 1,676.2 crore fewer default loans at the end of September from three months earlier.
At the end of September, the banking sector’s total default loans stood at Tk 94,440.5 crore, which was 8.88 per cent of the total outstanding loans, according to data from the BB.
Experts said that bad loans will increase a lot in the upcoming days as the loan moratorium facility has expired.
