BM Desk : The central bank warned banks about this in a circular yesterday, explaining that from now on, the excess portion of the current loan cannot be renewed in any other way without paying it. Banks are renewing the excess portion of the current loan without making any adjustments, and frequently, a separate loan is created without paying the excess portion, giving the customer the opportunity to remain default-free without paying a single taka of the current loan.
press was informed by a Bangladesh Bank official that there is now a culture of continuing to make regular loan payments without making the current one. For instance, he stated, a corporate group might have borrowed up to Tk 1,000 crore. In essence, the norm is that the businessman will take out a loan and repay it within the specified limit if needed. The full loan will be modified or repaid at the end of the year based on the specified limit.
The majority of businesspeople, however, don’t, and by the end of the year, their total may have reached Tk 1,200 crore, including interest. They then renew the entire loan and turn the extra portion into a different loan. Or they receive approval for a new cap of Tk 1,200 crore. As a result, their loan remained regular without paying a single taka.
According to the directive, the current loan must be renewed within its current period. The excess amount of the loan, however, cannot be renewed without modification. It is not possible to separate the excess amount of the current loan from the original loan and transfer it as a new loan or any other loan. The excess amount has to be paid back.
The loan classification policy was loose under the previous administration. After last August, strictness was enforced. The number of delinquent debts had risen to almost 4 lakh 20 thousand crore taka by the end of March this year. It was 1 lakh 45 thousand crore taka at the end of December 2023. This indicates that throughout the past 15 months, the number of delinquent loans has nearly tripled. Those concerned believe that defaulted loans will increase further as a result of the new policy.
