BB relaxes policy for NBFI defaulters

Bangladesh Bank yesterday gave a remedy to the defaulters of non-bank financial institutions (NBFIs), saying the borrowers could get a waiver of 50 per cent on their interest amount if they repay loans within a year.

However, the defaulters will have to provide a 2 per cent down payment of their bad assets to enjoy the one-time exit policy, according to a Bangladesh Bank notice.

Loans that turned sour before December 31 last year can enjoy the relaxed policy, which allows NBFIs to waive 50 per cent of the interest imposed.

Imposed interest is generated when lenders calculate the amount when loans stay in the unclassified zone and the default categories of sub-standard and doubtful loans. However, NBFIs can waive the entire uncharged and penal interests imposed on defaulters.

Lenders usually calculate unapplied interest on the funds that fall in the bad category of default loans.

Non-banks cannot consider the bad assets that will be availed under the exit facility as unclassified loans.

The interest amount to be waived will be transferred to a block account.

The defaulters will enjoy the waiver after they repay the entire amount of the bad loan, excluding the waived interest, within a year.

The relaxed repayment facility will be annulled if the defaulter fails to pay back the loan on time.

Defaulters will have to apply to NBFIs to take the one-time exit by April 30. NBFIs will have to take the decision to provide the support to defaulters within the two months after applications are filed.

Non-performing loans in the country's 34 NBFIs stood at Tk 11,757 crore as of September last year, up 17 per cent from nine months ago.