Bangladesh Bank has made loan restructuring facility easier for affected borrowers.
To maintain business operations and reduce financial pressure, the central bank has announced some new policy support, which will be applicable to all scheduled banks in the country.
A notification issued on Sunday (February 22) said that banks have been given additional flexibility in collecting down payments in the case of loan restructuring or exit facilities.
Earlier, the entire down payment had to be paid at once. Now, based on the customer's application, 50% of the down payment can be paid immediately and the remaining 50% within the next six months.
As a result, bankers believe that the pressure to raise large sums of money will be reduced to some extent.
In addition, in cases where policy support has already been approved but could not be implemented within the stipulated time due to logical reasons, an additional three months have been allowed for loan restructuring.
This will give additional time to the really affected but promising institutions to turn around.
The central bank has not directly given any single directive on interest waiver. Rather, the board of directors of the concerned bank has been given the power to take a decision considering the banker-customer relationship under the existing policy.
In other words, whether interest will be waived or not will depend on each bank's own assessment.
Analysts say that this policy support is timely in the context of recent economic stress, global market uncertainty and internal liquidity crisis.
Many industrial enterprises are under pressure due to raw material import costs, high interest rates and market contraction.
As a result, creating opportunities for restructuring without going into loan default can be positive for the stability of the banking sector.
However, according to experts, one must be careful that excessive flexibility does not create opportunities for unethical borrowers.
Identifying and providing assistance to truly affected and capable institutions can have a positive impact on production, employment and the banking sector.
The central bank said that this directive has been issued based on the approval of higher authorities. It remains to be seen how effectively banks implement this opportunity and how much relief it actually brings to the business sector.
