Bangladesh Bank (BB) has decided not to extend the loan moratorium facility beyond December 31.
BB Governor Fazle Kabir announced the decision at a meeting with bankers at the central bank on Tuesday.
Under the moratorium, bank clients would not be recorded as defaulters even if they failed to pay any instalments in 2020. In 2021, borrowers to remain out of default needed to pay just 25 per cent of their scheduled instalments.
The facility was first introduced in mid-2020 amid the Covid-19 pandemic and extended several times to allow people falling into hard times to cope.
“It means from January 1; banks can declare loans as classified upon borrowers failing to pay instalments in accordance with the normal rules and regulations,” according to a report published by UNB.
“Some clients are still hoping for the benefit to continue, and also new benefits. But this advantage is no longer available from the New Year,” said Md. Serajul Islam, the spokesperson of the central bank.
The FBCCI, an apex body of traders, had written to the governor on December 15 for yet another extension to this special facility until June 2022.
They contended economic activities have not returned to normal, affecting traders’ ability to pay, as some are still in dire straits. But the central bank has now decisively rejected the proposal.