But borrowers to get more time to pay instalments
The moratorium facility on the repayment of loan instalments extended to help businesses and individuals tide over the economic fallout of the global coronavirus pandemic will not be extended any further, in yet another sign that the worse is behind.
But borrowers of term loans will get more time to pay their instalments.
Banks will be able 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, as per the central bank notice issued on Sunday.
The tenure extension cannot be for more than two years.
The loan moratorium facility has expired on December 31, 2020. The central bank made the decision after assessing the state of the economy and business, said a high official of the central bank.
Following the outbreak of coronavirus in Bangladesh, the central bank on March 19 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 to December 31.
The default loans in the country’s banking sector declined in the third quarter of last year owing to the loan 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.