Banks ordered not to raise industrial term loan instalment amount despite hike in interest rate
The central bank has ordered scheduled banks not to raise the instalment amount for industrial term loans and home loans even as the market-based interest rate has hiked in recent times.
In a circular issued today (25 June), the Bangladesh Bank asked all managing directors of scheduled banks to comply with the instructions.
Customers who took industrial term loans and house finance loans before July 2023 will enjoy the facility, the central bank said in the circular.
However, borrowers who have been identified as defaulters as of 31st March 2024 will not be eligible for the facility.
Bankers have panned the central bank move.
Banks are facing a liquidity crunch. Many banks are now collecting high interest deposits in order to pay full interest to depositors. Amid such a situation, providing borrowers with such facilities is not rational in any way, they said.
The central bank, in defence of its move, said in the circular that the instructions have been given as borrowers are facing problems in paying back loans amid the current global economic volatility.
