BB eases repayment conditions to ensure smooth rawhide procurement before Eid

Loan limits will now hinge on the banker–customer relationship, it says

Bangladesh Bank has eased lending conditions for rawhide traders before Eid-ul-Azha, relaxing repayment requirements.

The loan limit will be determined based on the banker-customer relationship, the central bank said on Tuesday.

In an advisory, Bangladesh Bank said if traders, whose previous loans have been rescheduled, want to take a new loan before Eid-ul-Azha, the obligation to repay a certain portion of the previous arrears will remain relaxed until Jun 30.

This means they will be entitled to borrow anew without paying the installment of the previous loan.

The central bank has instructed banks to set a target for loan disbursement to buy rawhides of sacrificial animals.

According to BB, the loan allocation will not be less than the previous year's target in any way.

The target set this time and information on the loans disbursed will have to be reported to Bangladesh Bank by Jul 31.

Describing the leather industry as an important export-oriented sector, the central bank said: “A large part of the raw materials for this sector comes from the skins of sacrificial animals during Eid-ul-Azha.

“Therefore, it is very important for traders to have sufficient money in their hands at this time. This will make it possible to collect, store and sell leather properly,” it adds.