Staff Correspondent | New Age May 10,2020
The Bangladesh Bank on Sunday allowed banks to issue loans to the large- and medium-scale businesses under the government’s Tk 30,000-crore stimulus package even if the borrowers fail to secure the minimum rating to be eligible for getting loans.
As per the central bank’s guidelines on internal credit risk rating system for banks and its relevant directives, banks were barred from issuing credit to any business in case of its failure to secure at least ‘marginal’ rating.
The ratings of the businesses are set based on the immediate past year’s business activities under the guidelines on internal credit risk rating system of banks.
On Sunday, the central bank issued a circular in this regard, exempting banks from following the BB’s Internal Credit Risk Rating System.
In that case, the Bangladesh Bank suggested that banks select borrowers on the basis of banker-customer relationship, analysing credit risk following their own guidelines.
Generally, banks can finance only ‘Excellent’ and ‘Good’ rated borrowers as per the guidelines. ‘Marginal’ rated borrowers get loan under special consideration and ‘Unacceptable’ rated customers are not allowed to get any bank loan.
The BB on May 2 relaxed loan disbursement rules under the Tk 30,000 crore stimulus package, giving banks 10 days – after every quarter – to adjust the extra amount if loans exceed the sanctioned limit.
Before that, banks got five days after every quarter to adjust loans if the allowable limit was exceeded.
According to the central bank instructions, the total outstanding bank loans, including interest, cannot exceed the sanctioned loan limit of a borrower.
If the limit exceeds, the banks will have to adjust the extra amount within 10 days of a quarter’s end.
On April 12, the Bangladesh Bank issued a guideline setting strict conditions for loan disbursement under the Tk 30,000 crore stimulus package.
The conditions include maintaining a single borrower exposure limit, loan classification and provisioning rules, and the highest loan limits for both banks and clients.
