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BUILD thinks the good borrowers deserve patronization in various forms including rebate or incentives’
Business Initiative Leading Development (BUILD) underscored the need for continuing the benefits of good borrower to discourage loan defaulting culture.
“BUILD thinks the good borrowers deserve patronization in various forms including rebate or incentives. The continuation of recognizing and honoring the good borrowers with rebate is still praiseworthy. But the central bank can revisit the new circular and continue the previously given rebate to the good borrowers to discourage loan defaulting culture,” said a BUILD press release on Saturday.
Bangladesh Bank recently withdrew the previous 10% rebate to the good borrowers on the interest or profit accrued from working capital, demand and term loans and investments through a recent circular.
This incentive was given until the month of September of last year.
However, in the circular, Bangladesh Bank asked scheduled banks to continue identifying good borrowers and honor them. From now on scheduled banks will identify good borrowers or investors at the end of December every year and only honor them through organizing annual events.
The banking sector has a serious dearth of good borrowers. Bangladesh Bank used to encourage banks to patronize the good borrowers through giving 10 percent incentives. Since the high presence of non-performing loans remains a major problem for most of the banks in the country, finding good borrowers who are regular in servicing their debt obligations needs to be a priority task for the bankers.
At this stage of Covid-19 businesses are struggling for sustenance, instead of providing good borrowers some additional benefits who are trying hard to maintain the employment of their corporates, withdrawing an ongoing benefit will discourage them, in order to recognize good borrowers by providing them some incentives the existing policies should remain as it is.
(DT)
