Loan moratorium may be extended further

The central bank is likely to extend the ongoing moratorium on the payment of loan instalments by another three months to December as borrowers are still struggling to make a comeback from the coronavirus pandemic.

The moratorium on bank loan payments was introduced in the middle of March after the pandemic arrived on the shores of the country and hammered economic activities for the next three months.

The support was expected to last until the end of June. Later it was extended up to September as the health crisis showed no signs of abating.

Although the economic activities are picking up, the health crisis is still there and uncertainties are running deep.

This prompted the central bank to start thinking whether the support should be extended further. A final decision has not been taken yet, Bangladesh Bank officials said.

But commercial bankers say the moratorium extension by another three months would not be a wise move given the ongoing fragile condition of the financial sector. The decision to bring all borrowers irrespectively under the moratorium facility will not bring any good for the financial sector.

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