Bangladesh Bank has scrapped its decision to give interest rebates on loans to “good” borrowers with no record of defaults, reports bdnews24.com.

The move, announced on Thursday, has drawn criticism as the central bank has continued to extend privileges to defaulters.

Three days ago, the central bank had issued another notice, following which no borrower will be marked as defaulter if they do not pay instalments until September amid the coronavirus crisis.

Former deputy governor of Bangladesh Bank Khondker Ibrahim Khaled has criticised the central bank’s decision to cancel interest rebates for those who repay loans regularly while continuing privileges for defaulters. He also said the central bank has never treated ‘good’ borrowers well.

“This is the reason behind the sad state of the banking sector,” said Khaled, criticising the central bank’s latest move.

Bangladesh Bank had announced the incentives for ‘good’ borrowers in May last year on top of affording loan defaulters the opportunity to repay.

Those who were unable to pay but can “adequately justify” their situation will be allowed to pay off the loans with a 2 percent down payment on the loan amount and 9 percent interest over 10 years, according to the previous announcement.

The central bank had also asked the banks to give “good” borrowers a 10 percent rebate on the total interests on loans.

On Thursday, Bangladesh Bank said it had given the rebate as the interest rates were too high, but it is no longer required after the rates are cut to single digits.

The central bank said in a notice that the “good” borrowers would get the rebate until Sept 30 last year.

It asked the banks to continue identifying the “good” borrowers, give them certificates and include success stories of top 10 “good” borrowers in annual reports.

BSS adds: Bangladesh Bank (BB) has instructed all banks to set up help desk at each branch to assist applicants seeking loans under the stimulus packages.

“Banks must set up independent help desk at each branch for helping the applicants seeking loans or investment and also display all relevant information about the stimulus packages at easily visible location of each branch,” said a BB circular issued on Thursday.

The head office of each bank will have to closely monitor the loan disbursement activities under those packages, the circular added.

The central bank also instructed all banks to evaluate loan applications within the shortest possible time and if a loan cannot be disbursed, the bank must inform that applicant about the matter quickly.