Bangladesh Bank eases loan rules

In order to help the affected firms and restore normalcy in business activities, Bangladesh Bank has further eased its policy regarding the renewal and restructuring of large defaulted loans.

According to the new policy, companies or groups holding defaulted loans above Tk 1,000 crore can apply for special facility of renewal considering their special relation with the bank. These can be repaid within a period of 15 years, including a grace period of two years.

Bangladesh Bank has issued a circular on Monday announcing extension of time limit for application for renewal/restructuring of large defaulted loans until September 30 from June 30 and settlement of application before December 31.

The specially restructured loans can be extended by half of the remaining period plus four years. For instance, if a defaulted loan is remaining for 10 years then the term can be extended by nine years.

In the case of firms or groups having defaulted loans less than Tk 1,000 crore, renewal/restructuring is permitted up to 10 years, including a grace period of two years.

-AJM