In the January-March quarter, Bangladesh’s default loans surged to Taka 1,31,620 crore, accounting for 8.80 per cent of the total outstanding loans. As a result, textile millers and ready-made garment manufacturers are now requesting an extension of the loan repayment deadline until December of the following year.
They assert that their production and overall business have experienced a substantial decline in recent months, warranting additional time to recuperate and stabilize their operations.
Following the onset of the Covid-19 pandemic in March 2020, the central bank has undertaken various initiatives to bolster businesses. These efforts encompassed implementing loan moratoriums, extending loan repayment deadlines, and taking preventive measures against defaults.
However, as of 30th June of the current year, the window for rescheduling loans by paying a nominal portion has expired. Consequently, businesses are currently fervently advocating for an extended repayment period, which would alleviate financial burdens and enable them to fulfill their obligations more effectively.
On 20th June, a circular was issued by the central bank, offering an exemption from default status under the condition that at least 50 per cent of the term loan and current principal is repaid by June. However, apparel makers are requesting an extension of this period until December 2024.
Conversely, the managing director of a private bank expressed their opinion to TBS, stating that there is currently no justification for granting such facilities. The banker emphasized that if the loan money is not repaid promptly, it would become challenging to provide new loans, leading to disruptions in annual growth.
