Bangladesh gives bank loan defaulters until September to repay instalments

Borrowers have been given until September to repay instalments to banks before their loans are classified as bad debts.

Chief Economics
Published : 15 June 2020, 03:58 PM
Updated : 15 June 2020, 03:58 PM

Bangladesh Bank on Monday issued a circular extending the timeframe during which the failure to repay a loan would not be considered in default.

The central bank had previously announced that no banks would be allowed to downgrade any loan until June 30, which means that failure of any borrower to repay loan instalments between January and June would not result in any default.

However, banks were allowed to upgrade the classification of loans in line with the applicable rules.

Highlighting the economic impact of the coronavirus epidemic, the central bank noted that industries, businesses and services were having difficulties resuming normal operations.

As a result, it has issued new guidelines to determine and classify loans, investment terms and repayment schedules to minimise the burden of the COVID-19 outbreak on borrowers and their businesses.

"The government has kept giving opportunities to loan defaulters. But the state of banks are worsening by the day and it's not getting the required attention," Khondokar Ibrahim Khaled, former governor of Bangladesh Bank, told

The loans disbursed by the banks stood over Tk 10.11 trillion by December last year. The amount of default loan was Tk 943.31 billion, or 9.32 percent of the total credit.

Toufique Imrose Khalidi
Editor-in-Chief and Publisher