This is as per media reports, which underlined, announced earlier this month, the new policy shortens the tenure from six months to three months effective September 30 this year, and further reduces it to just three days from March 31, 2025.
Business leaders are disappointed over Bangladesh Bank’s decision to cut loan instalment payment defer tenure from 6 months to 3 months from September 30.
They believe this will push up classified loans, jeopardising the ease of doing business, reducing foreign currency earnings, and job opportunities, as it will likely hamper process of opening LCs.
Industrialists fear that this decision will lead to a surge in classified loans, posing threats to the ease of doing business, foreign currency earnings, and job opportunities.
The Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) even convened a meeting to address these concerns, where it was highlighted that most industrialists may default on loans due to this decision.
Amid ongoing global and domestic economic challenges, businesses are struggling to meet existing repayment schedules even if the FBCCI plans to engage with the central bank governor on this issue, and if needed, seek the PMO’s intervention.
While some experts and central bank officials argue that the decision aligns with international standards and will help reduce classified loans, industry insiders remain sceptical. They argue that the current economic situation demands a more business-friendly approach from the central bank.
Concerns have been raised regarding the efficacy of the new policy in reducing classified loans, especially considering the challenges faced by businesses amidst the economic crisis.
Critics suggest that instead of imposing stricter repayment terms, the central bank should focus on addressing the root causes of default loans, such as fraudulent activities.
The reduction in loan deferment tenure comes after special concessions were granted by the Bangladesh Bank in 2020 to alleviate the adverse effects of the Covid-19 pandemic.
However, stakeholders now urge for a more nuanced approach that considers the realities of the current economic landscape while balancing the interests of businesses and financial institutions.
Fibre2Fashion News Desk (DR)