Dhaka, Bangladesh (BBN)- The central bank of Bangladesh has relaxed the loan repayment and rescheduling policy for the debt-ridden cold storages in the northern Bangladesh considering interest of the farmers of the region.
Under the relaxations, the banks will be allowed to convert the irregular loans of the cold storages’ owners into the block account.
The block account holders of the cold storages’ owners will get one-year moratorium facility meaning that they will not require repaying any loan in the period.
The block account holders will get eight years to repay their project loans and five years for working capital, according to a circular, issued by the Bangladesh Bank (BB) on Thursday.
The circular also said the banks will impose maximum 10 per cent rate of interest or equivalent rate of their cost of fund on the block account holders.
The central bank, however, said the banks would have to impose the lower rate between 10 per cent and the cost of fund.
The banks will be able to give exemption, fully or partially, of the unrealised interest, interest suspense or penalty interest of the block accounts.
The banks will not be able to give exemption of the principal amount of the loans and cost of the lawsuit for the debt-ridden cold storages.
The respective boards of the banks will be able to relax the down payment policy in line with the BB rules of rescheduling of the defaulted loans of the cold storages’ owners.
Besides, the banks will be allowed to give fresh loans to the cold storages’ owners.
The banks will have to take no-objection certificate on the case-to-case basis from the BB to relax the rescheduling policy and to give fresh loans.
The banks will have to follow the regular classified loan and provisioning policy set by the central bank if the block account holders fail to repay the loans in time.
The clients will have to give fresh mortgages if they face deficit of mortgages to receive new loans, the circular added.
The cold storages’ owners will have to submit their applications before the banks within two months to enjoy the facility.
The owners will have to attach documents of their financial losses with the applications.
BBN/SSR/AD-30Jan15-9:31 am (BST)