Despite reduced instalment facilities in term loans, banks have rescheduled loans worth Tk5960 crore and waived interest amounting to Tk2816 crore of interest waived in 6 months (January-June), revealed latest data of Bangladesh Bank (BB).

According to the BB data, state-owned banks rescheduled loans worth Tk 1,300 crore, while private banks Tk 4,150 crore. The remaining Tk 779 crore has been rescheduled by specialized banks.

The BB introduced a loan moratorium and reduced instalment facility during the Covid pandemic to avert huge defaults as the businesses were affected by the adverse impact of the Covid-19 pandemic.

Read: Default bank loans surge to record Tk 1.25 lakh crore in Bangladesh: BB

Despite those moves, the accumulated default loans rose to Tk1.25 lakh crore till June this year. The banks had to reschedule around Tk5960 crore, posing a challenge to the sector.

Bankers said many small and big businesses have been affected due to the pandemic. Many have halted regular loan repayments, raising the issue of the pandemic. Some banks are not able to collect the loan repayments due to irregularities and corruption.

As a result, the default loan volume is increasing, and now stands at around 9 per cent of the country’s total disbursement of loans.