Non-classification of loans: FBCCI requests BB to extend time until Dec

The country’s apex trade body has requested the central bank to extend the existing time for non-classification of loans by six months to December, 2020 considering the Covid-19 pandemic, sources said.

The Bangladesh Bank has already extended the facility until June 30 from January 01, 2020 to help businesses ride out the storm of the Covid-19 pandemic.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) made the request in the wake of the adverse impact of prevailing COVID-19 pandemic on trade and economy on June 08 last.

When contacted, FBCCI president Sheikh Fazle Fahim told the FE that they have requested the central bank to scrap the process of making classification loans by six more months.

“We are now discussing the issue with the government authorities concerned to extend the existing period of non-classification of loan. No decision has yet been finalised in this regard.”

An official at the BB said: “We are now scrutinising the issue. The FBCCI has made request, seeking to extend the existing non-classification period of loan.”

Extension is only depending on the coronavirus situation in the country, he added.

The apex chamber organisation recently made the request to avoid increasing alarming non-performing loan or NPL and securing bank investments.

In the letter, the FBCCI president said, “Considering the economic recovery realities and negligible execution of stimulus loans and others, we request deferment/moratorium and interest blocks till December 2020 and if needed till April 2021.”

“The request is to avoid alarming loan classifications in phases, increase in alarming NPL, securing bank investments as block interest and loans will be paid back to the banks through restructuring for longer term as economic recovery more towards normalcy,” Mr. Fazle Fahim mentioned in the letter.

“We have also formed community-represented committees in districts, help desks at FBCCI and district chambers and our associations to facilitate all enterprises and banks for “Know Your Customer” or KYC,” the letter reads.

The FBCCI formed divisional councils and sectoral councils to facilitate execution of stimulus loans, roadmap to sustainability in 2020, recovery in 2021 and 2022.

It has also proposed forming a small working group (WG) between BB and FBCCI to facilitate stimulus execution roadmap and continuous simplifications.

The volume of non-performing loans (NPLs) was Tk 943.13 billion at the end of 2019, up 0.42 per cent year-on-year, according to available data from the Bangladesh Bank.

News Source: https://thefinancialexpress.com.bd/trade/non-classification-of-loans-fbcci-requests-bb-to-extend-time-until-dec-1592192737

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