Bangladesh Bank on Tuesday said that the two master circulars — one on loan classification and provisioning and another on loan rescheduling —  would not be revised to ensure international standard for the country’s banking system.
The two circulars issued by the central bank recently will not make any harm to the country’s garment and textile sector as the central bank maintained previous rules for default loans, said BB deputy governor SK Sur Chowdhury at a meeting with the leaders of BGMEA, BKMEA and BTMEA at the central bank’s headquarters in the capital.
The business leaders said that their trade and commerce would plunge into a crisis because of the new BB circulars.
They said, ‘Our business has already faced a downward trend due to the existing economic crisis in the European countries and North America. Under the circumstances, the new circulars will worsen the situation.’
They demanded the central bank not to increase the down payment in loan rescheduling.
The business leaders said that the credit ratings for their industries would drop as the BB had reduced the time limit by three months for a loan (after stopping to give instalment) to be considered as sub-standard loan, doubtful loan and bad or loss loan.
On June 14, the BB issued the two circulars to the managing directors and the chief executive officers of all commercial banks.
After the issuance of the circulars, the Association of Bankers, Bangladesh and the Federation of Bangladesh Chambers of Commerce and Industry demanded revisions to the circulars, saying that the new rules would bring an adverse impact on the country’s banking and business sectors.
‘There is no scope to revise the circulars,’ SK Sur said at Tuesday’s meeting.
He said that the time limit for default loan had not been changed in the new circulars.
He said, ‘A loan will be considered as default loan if the client does not pay any instalment within six months as per the Bank Company act. So, from now on, the sub-standard loan will not be considered as default loan.’
The credit ratings of the industries will not be affected for having sub-standard loans and the central bank will give direction to credit rating agencies in this regard, he said.
For the sick industries, the central bank has formulated a separate credit policy so that the commercial banks could maintain it, he said.
The business leaders alleged that a number of private commercial banks had not maintained the relaxed loan policies introduced by the BB for the sick industries.
SK Sur said, ‘If a bank does not follow the rules, you, the businessmen, should personally approach to the bank in this regard.’
Bangladesh Garments Manufacturers and Exporters Association acting president Nasir Uddin Chowdhury, vice-president Siddiqur Rahman and its banking committee chairman Golam Sarwar Milon, Bangladesh Textile Mills Association general secretary Firoz Ahmed and leaders of Bangladesh Knitwear Manufacturers and Exporters Association and senior officials of BB attended the meeting.