According to the relaxed policy, traders will be allowed to reschedule their defaulted loans after paying only a 2% down payment on outstanding loans as of June 30
The Bangladesh Bank has extended the time for rescheduling loans of the tannery sector by another two months – from October 29 to December 30 this year.
Earlier, the central bank enhanced the facilities for three months.
Rawhide traders can apply for loan rescheduling till December 30, read a central bank circular issued on Tuesday.
On July 5, the central bank relaxed the loan rescheduling rules for rawhide traders to facilitate the industry with sufficient funds during the Eid-ul-Adha.
According to the relaxed policy, traders will be allowed to reschedule their defaulted loans after paying only a 2% down payment on outstanding loans as of June 30.
After regularising loans, borrowers can enjoy a renewed repayment tenure of up to six years, including a one-year grace period.
Clients who took term loans will be given a maximum of eight years, including the one-year grace period. Traders will have to apply to enjoy the relaxed facilities. Clients will have to pay back at least 15% of their outstanding loans after rescheduling their non-performing loans if they want to secure further funding.
As a result of the central bank's decision, tannery owners will be able to borrow, apart from rescheduling their existing default loans, at 5% interest from a Tk33,000 crore package announced for the industry and service sectors.
Every year before Eid-ul-Adha, tannery owners get loans for a period of 180 days. Again, they can only take the amount they repay the following year.
The central bank has informed the banks that the conditions for giving new loans can be relaxed so that the rawhide traders can get more loans this year.
The government has set a target to rake in $5 billion in export earnings from the leather sector by 2022.