General

Moratorium extension to help businesses tide over Covid crisis: FnM

Defending the central bank’s move for further relaxation of the bank loan repayment system by extending the moratorium till December 31, Finance Minister AHM Mustafa Kamal has said the step aims at helping businessmen tide over the Covid-induced financial crisis.

 

“If any measures are taken, somehow someone will be affected, but we’re in favour of the businessmen,” he told reporters, responding to a poser while briefing on the outcome of the meeting of the Cabinet Committee on Public Purchase on Wednesday.

 

“If businessmen thrive, then banks will be running well. But this is the time to extend help to the businessmen,” he added.

 

The Bangladesh Bank, in a circular on September 28, said that classification of loan will not be changed between January 1 and December 31 this year even if anyone failed to pay back as per the schedule.

 

The finance minister said that the measures were taken considering the Covid impact on businesses. “If time is not extended for loan repayment, they can’t be able to execute export orders and settle letters of credit for import of goods.”

 

Earlier, the moratorium was applicable till June 30. It was subsequently extended till September 30 through a similar circular issued by the central bank on June 15 this year.

 

The new circular, issued by its Banking Regulation and Policy Department (BRPD), said businesses in Bangladesh were affected like in other parts of the globe due to the coronavirus outbreak.

 

It is assumed that many loan recipients may not be able to repay as per the schedule, it said. In such a situation, there is an apprehension that the trade and businesses might be affected and eventually the overall employment scenario.

 

Considering the situation, this was decided that the classification of any loan will remain unchanged until December 31 and will be treated as it was from January 1, mentioned the BB circular.

 

The directive was also sent to the chief executives of all scheduled banks.

 

According to the new guidelines, a borrower will not be considered as a defaulter even if he does not pay any installment from January 1 to December 31 this year.

 

No penalty, interest or additional fees may also be levied on the loan during this period,

 

Source: United News of Bangladesh