BB asks banks to continue identifying good borrowers
The central bank has asked banks to keep their activities to recognize good borrowers and investors to facilitate providing incentives to them.
The instruction came as the Bangladesh Lender said great borrowers would only get the 10 % rebate on interest or profits by September 30 this past year.
In 2015, the BB unveiled a fresh policy to provide very good borrowers with incentives, like the 10 % rebate on interests, to remove wilful loan default culture.
Before this, the central bank formulated various policies to rescue struggling big debtors but never did they produce any sort of institutional policy to inspire a good financing culture in Bangladesh.
IN-MAY 2019, the BB instructed banks to supply 10 % rebate on the interest or profit accrued from working capital, demand and term loans and investments from October to September of a year.
But after enforcing the cap over lending and deposit costs from April 1, the central bank decided a good borrower or trader would get the rebate by September 30, 2019.
But banks would need to continue the process to identify the nice borrowers and buyers, the BB said in a see yesterday.
Today, banks would identify very good borrowers or investors towards the end of December each year.
A good good borrower would have to have their working capital loans simply because non-classified by December of a year and the preceding four quarters and there has to be a reasonable transaction in the loan account.
In case of demand loans, all credits would need to be modified as non-classified until December and in the last four quarters. The word loan borrowers would need to possess 12 preceding instalments cleared promptly and their loans would need to carry the status of non-classified in the preceding four quarters, to be eligible as good borrowers.
If a borrower has more than one loan, they must fulfil each condition for every one of the load products, the BB find said.
In all cases, if a debtor or their related companies have a classified loan in virtually any bank in the preceding 12 months, they would not qualify nearly as good borrowers.
If financing is regularised through a restructuring or rescheduling for the very first time for logical causes, they might qualify as a good borrower.
The info on the mortgage of an excellent borrower should be delivered to the Credit Information Bureau.
