Loan defaulters will qualify for coronavirus stimulus package11 May 2020 bdnews24.com
Bangladesh Bank has eased restrictions on clearing funds from the Tk 300 billion coronavirus stimulus package for industrial sectors allowing the loan defaulters to apply for the incentives.
The central bank sent out a notice to all banks, opening this controversial opportunity for loan defaulters on Sunday.
It cited disruptions in activities related to internal credit risk rating due to the coronavirus shutdown.
Bangladesh Bank also eased the requirement for documentation for the borrowers to apply for the loans.
It said the banks will not need to complete internal credit risk rating as per the central bank guidelines so that the businesses can resume work fast.
The banks will assess the credit risk in line with their own guidelines for the borrowers on the basis of bank-client relations.
After Prime Minister Sheikh Hasina announced the stimulus package, Bangladesh Bank on Apr 12 said loan defaulters would not be entitled to the funds.
Even the borrowers who have their debts rescheduled more than three times through a special scheme for defaulters to repay would not get the bailout funds either, the central bank had said.
As it has lifted the restrictions, researcher Ahsan H Mansur fears that the defaulters will "gobble up" all the funds.
"The good entrepreneurs will get nothing. The banks will be in a worse crisis. It's an ominous sign for them," said Mansur, the chairman of BRAC Bank.
Pointing out the mounting bad debt, he said, "The defaulters won't repay if they get the funds during the coronavirus crisis. We've seen it in the past."