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Non-payment of monthly or quarterly instalments under the Bangladesh Bank-announced loan moratorium facility for customers against their bank loans would result in increased interest payments once the regulatory relaxation expires.
With a view to saving people and businesses from the economic shocks induced by the coronavirus outbreak, the central bank extended its embargo on loan degradation in phases till December this year, allowing borrowers not to pay their loans during this time.
Even though the banks refrained from downgrading classification of loans due to the customers’ instalment non-payment under the loan moratorium facility, the banks continued to charge interest on the outstanding loans of their customers, BB officials and bankers said.
If any customer refrained from paying loan instalments for twelve months in 2020, interest at the rate of 9 per cent would be added to the outstanding loans.
While the repayment tenure of the credit facility would be extended by six months, the banks will issue fresh repayment schedules for customers by distributing the additional interest equally among the remaining instalments, they said.
If a customer had Tk 1 lakh in outstanding loan at the end of December 2019 and the customer refrained from paying any instalments throughout the year 2020, the customer’s outstanding loan would amount to Tk 1,09,000 at the end of December this year, including the interest amount, given that the interest rate was set at 9 per cent, Meghna Bank managing director and chief executive officer Sohail RK Hussain told New Age.
Of the interest, the banks would deduct the interest waived, at the applicable rate announced by the central bank, for the months of April and May from the outstanding amount and fix a fresh repayment schedule for the particular customer, Sohail said.
Considering the applicable 100-per cent interest waiver for the months of April and May against up to Tk 1 lakh in outstanding loans, the customer would get interest waivers of Tk 1,500 and will have to pay an additional Tk 7,500 as interest instead of Tk 9,000 along with the outstanding loan amount, he said.
As per the BB circular, the rate of interest waiver would vary depending on the outstanding loan amount. The rate would be 2 per cent against outstanding loans ranging between Tk 1 lakh and Tk 10 lakh while it would be 1 per cent for outstanding loans above Tk 10 lakh.
Business entities which have received working capital loans on top of their outstanding loans would be charged at the rate of 4.5 per cent on fresh loans issued under the stimulus package, he elaborated.
Agrani Bank managing director and chief executive officer Mohammad Shams-Ul Islam told New Age that the interest would be charged on outstanding loans of customers who received the loan moratorium facility.
The payable amount of instalment would definitely increase once the customers would start repayment after the expiry of the loan moratorium facility, he said.
In that context, individuals who have the capacity to repay loans should start payment to avoid the additional interest payment burden, Shams said.
(NA)
