The moratorium facility on the repayment of loan instalments ,extended to help businesses and individuals over the economic fallout of the global coronavirus pandemic, will not be further extended , according to the Bangladesh Bank.
But borrowers of term loans will get more time to pay their instalments.
Banks will now 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 , but the tenure of extension cannot be allowed for more than two years, said the central bank.
"The loan moratorium facility has expired on December 31, 2020. Bangladesh Bank took the decision after assessing the state of the economy and business," said a high official of the BB.
Following the outbreak of Covid-19 in the country, BB on March 19 ordered banks not to downgrade the classification of any loans for the borrowers’ failure to furnish loan instalments until June 30, 2020. That facility had been extended twice to December 31, 2020.
The default loans in the country’s banking sector declined in the third quarter of the 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, 2020 from three months earlier.
At the end of September, 2020 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 the BB.
Earlier, the central bank offered borrowers loan moratorium facility to offset adverse impacts of the ongoing Covid-19 pandemic on the overall business activities in the country.
It said borrowers who rescheduled their defaulted loans under the Bangladesh Bank's (BB) relaxed policy in 2019 were allowed to enjoy loan moratorium facilities like other clients.
The central bank also suspended the rules for classification of loans from January 1 to December 31, 2020 to help the businesses overcome the damaging effects of Covid-19.
On May16 last year, the central bank offered a special facility to loan defaulters, allowing them to reschedule loans by paying 2.0 per cent down payment for a maximum period of 10 years.