Tannery loan rescheduling application deadline extended to 30 September

Summary:  

The central bank has published a circular on the extension of loan rescheduling till 30 September and asked the default tanners to file applications with a 2% down payment with their respective banks.

Content:

According to the policy introduced by Bangladesh Bank in January, banks were allowed to provide rescheduling and one-time exit facilities to the tannery owners that have already relocated to Savar.

Loan rescheduling had granted to the tannery owners because previously several loans granted to the tannery owners had turned defaulted for failure. The disturbance in installment payments has in turn hindered the usual cash flow to the sector.

To resolve the problem, the central bank issued the easy loan rescheduling policy along with five types of facilities to the tanners. The first facility being that, the tanners who are unable to continue the business can repay the loan with an additional 2% down payment but their interest would be waived. Tanners who are able can repay the loan can also repay it with 2% down payment on their loans.

Additionally, the loan repayment time has also been rescheduled to 30 September, which was originally set for 31 March and later extended to 30 June. The Central bank in the circular in 22 June said that the application time has been extended due to the uncontrollable pandemic situation. It has also been extended for the upcoming Eid-ul-Adha as most of their rawhide comes from the ritual sacrifice of the livestock.

So, the loan repayment includes a three year repayment exit policy, with a 2% down payment for tanners with bank loans for upto Tk 5crore as of 31 Dec, 2020.  Loans amounting to more than Tk 5 crore as of 31 Dec, 2020, the exit policy will provide them 5 years to repay their loans.

Other than this, the central bank said that the respective banks of the tanners would be able to decide about the interest waivers based on their relationship with the clients. They would also be able to sell collateral assets through prior approval of the borrowers if needed because the original loans and investments cannot be waived at any cost.

On top of that special facilities for the tanners might be arranged by the banks who want to continue their business. That is , they can reschedule their loans for upto ten years with a year’s grace period with a higher interest rate of 9%.

This new rescheduling facility is even available to borrowers who have already availed it earlier. But violating banking rules and regulations can hinder the lenders from availing of this facility.

There are other annulments to the loan rescheduling facility. That is, if a tanner fails to pay six monthly installments, or two quarterly installments, the facility would be revoked. However, installments paid before the scheme introduction, would not be counted as  down payments.

However, the tannery factories which have secured loans with forged documents or illegal means would not be entitled to get the loan rescheduling or exit facilities.

Picture and article source: https://www.tbsnews.net/economy/banking/tannery-loan-rescheduling-application-deadline-extended-30-sep-264742

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