• Financial

Bangladesh Bank warned, imposing double interest on incentive loans!

  • Financial
  • 13 January, 2021 12:47:23

Photo: Collected

News Desk: Bangladesh Bank has received irregularities in the imposition of interest on declared incentive loans for losses due to coronavirus infection. Some banks are not abiding by the directive to disburse loans at 4.5 per cent interest in the industry and services sector under the incentive. Surprisingly, the entire 9 per cent of the interest rate, i.e. double the interest, is being imposed on the customer. The customer is being harmed.

Bangladesh Bank has warned all the banks after knowing the matter. A circular in this regard was issued on Tuesday and sent to the chief executives of all the banks. According to the circular, a directive was issued on April 12 on financial incentives for industry and services to address the potential economic impact of coronavirus outbreaks in Bangladesh. Through the circular, under the financial assistance package announced by the Prime Minister, the rules were given to provide working capital loan facility to the affected organizations.

Half of the 9 per cent of the loan disbursed under this package will be repaid by the customer and the rest will be received by the concerned bank as subsidy from the government. Bangladesh Bank has come to know that some banks are not following this rule. The directive said on Tuesday that some banks were charging the entire interest on loans disbursed under the package in question against the customer's loan account. As a result, the customer is facing financial loss. The directive was issued to ensure uniform accounting of all banks and to ensure that customers are not harmed by the imposition of additional interest.

From now on, only 4.5 per cent of the loans disbursed under this package can be levied against the customer's loan account. The rest will have to be adjusted after receiving it from the government by preserving it separately. If the borrower does not pay the interest on time, the bank will be able to charge the entire interest i.e. 9 percent against the loan account. In addition, it will be considered as the responsibility of the customer. It has been asked to follow the instructions of this circular on all matters including debt collection, repayment of interest. Syed Mahbubur Rahman, managing director of Mutual Trust Bank, told Samakal that he had heard that many banks were charging customers 9 per cent interest on incentive loans for industry and services. It is immoral.

Because it has been said in the circular of incentive loan distribution, out of 9 percent, 4 and a half percent has to be taken from the customer. The remaining 4 and a half percent will be subsidized by the government. There is no scope for the regulatory body to disobey this directive. The government announced a total of 21 incentive packages worth Tk 1,21,353 crore for those affected by the coronavirus. Out of this, Tk 93,950 crore has been allocated for distribution of subsidized interest in CMSME, large scale industries and services, export oriented industries and agriculture sector under 10 packages.

A further Tk 2,000 crore has been allocated for the CMSME credit guarantee scheme. Although there is not much progress in disbursement of loans in CMSME and agriculture sector among these incentive packages, loans in industrial and service sectors are being disbursed fast. According to the latest data from Bangladesh Bank, loans worth Tk 31,000 crore have been disbursed till December out of the Tk 33,000 crore earmarked for the industry and services sector. Which is about 94 percent of the total target. Of this, Tk 25,600 crore has been disbursed as working capital loans of various institutions.

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