Special opportunities for loan defaulters in leather industry
Published: 08:11 PM, 5 July 2020 Updated: 08:46 PM, 5 July 2020
Ahead of Eid-ul-Adha, Bangladesh Bank has declared special benefits to the traders in the leather industry who have defaulted on their loans.
They will get the opportunity to reschedule the loan with only a 2 percent down payment. To get this facility, they have to apply by July 30. This information has been informed in a notification on Sunday.
A statement issued by the Banking Regulation and Policy Department of Bangladesh Bank said that almost half of the supply of raw materials used in the leather industry throughout the year comes from the skins of sacrificial animals every year on Eid-ul-Azha.
At this time, if it is possible to ensure the necessary money supply to the rawhide traders, on the one hand, it will be possible to save valuable raw materials, on the other hand, the marginalized people will benefit financially through the sale of sacrificial animal skins.
Bangladesh Bank says some loans in the sector are defaulting (classified) due to non-payment on a regular basis. As a result, it is not possible to maintain normal credit flow in this sector in many cases. In this situation, five decisions have been taken to reschedule their irregular loans in order to keep the flow of money flowing to the real leather traders in order to ensure the smooth and orderly conduct of sale and storage of sacrificial animal skins for the upcoming Eid-ul-Azha.
1. The loan can be rescheduled with a minimum down payment of 2% of the status of the loan as of June 30. Banks will be able to decide on their own based on the banker-customer relationship. Previously paid installments will not be considered as a down payment.
2. If the loan is classified for any reason beyond the reach of the borrowers and the business is operational, a rescheduling facility can be given.
3. On a case-to-case basis, solicitation and ongoing loans with a grace period of one year can be rescheduled for a maximum period of six years and term loans for a maximum period of eight years.
4. The condition of accepting ‘compromised amount’ in case of disbursement of new loans for the purchase of rawhides of sacrificial animals can be relaxed.
5. You have to apply for the loan rescheduling by July 30.
According to the latest data of Bangladesh Bank, the number of loans disbursed in the leather sector is a little more than Tk 4,000 crore. Of this, the amount of defaulted loan is higher than Tk3,000 crore. Most of which is long-term debt. Ninety percent of the defaulted loans belong to six state-owned commercial banks.