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Bangladesh Bank eases loan rescheduling policy for NBFIs over next 6 months

The central bank has relaxed the loan rescheduling policy for the non-banking financial institutions (NBFIs) for the next six months to facilitate financing for the businesses, affected by the ongoing political unrest.

The NBFIs have been allowed to reschedule loans by fixing their down payment and time-limit for repayment on the basis of NBFI-customer relationship for all affected sectors including small and medium enterprises (SMEs) and agriculture, under the relaxation facility.

The Bangladesh Bank (BB) has also allowed the NBFIs to restructure their unclassified loans through re-fixing the repayment schedule at a reasonable level.

“The NBFIs will have to obtain clearance from the central bank for all cases, following approval by their authorities,” a senior BB official told the FE.

He also said such relaxation facility will remain in effect until June 30, 2014.

The BB’s policy relaxation for NBFIs came just a week after it put into effect almost the same for the country’s commercial banks.

The central bank issued a directive in this connection Sunday, and asked the chief executive officers and managing directors of all NBFIs to follow the latest policy on loan rescheduling.

Earlier on December 23 last, the BB relaxed the loan rescheduling policy for the next six months for commercial banks to facilitate financing of the businesses, affected by the ongoing political turbulence.

The central bank has taken the latest measure as the country’s overall business activities came under tremendous pressure in the recent months following frequent spells of blockade and shutdown, enforced by the opposition parties over formation of the poll-time government.

Talking to the FE, another BB official said such policy relaxation will help the NBFIs improve their financial health through overcoming the ongoing volatile situation.

“We expect that the NBFIs as well as the businessmen will be benefited from the loan rescheduling policy relaxation,” he noted.

The Bangladesh Leasing and Finance Companies Association (BLFCA) welcomed the BB’s latest move. However, they observed that it would have a minimal impact on improving the NBFIs’ profitability position in the year 2013.

“We’ve welcomed it. But it should have been given in the first week of December this year so that the NBFIs and the banks could utilise such policy relaxation in loan rescheduling,” Asad Khan, chairman of BLFCA, told the FE.

He also urged the central bank to take initiatives to issue such directives for both the NBFIs and the banks simultaneously in the future.

Currently, 31 NBFIs are running their business across the country.

-Siddique Islam/ http://www.thefinancialexpress-bd.com/2013/12/30/11272

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