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The central bank has constituted a five-member committee to select industries and business entities, which were badly affected by reasons beyond their control, before providing policy support for their revival.
The committee will design the nature of support to borrowers with outstanding loans exceeding Tk 500 million, as they were hit hard by Covid-19, Russia-Ukraine war, external factors, floods and uncertainty over mass uprising.
In fact, the special regulatory move comes four days after a delegation of the country's apex trade body -- the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) -- placed such a demand while meeting with Bangladesh Bank (BB) governor Dr Ahsan H Mansur.
BB spokesperson Husne Ara Sikha says the selection committee comprises five members, including Mezbaul Haque, executive director of offsite supervision department, as convener, Dr Delwar Hossain, joint secretary of Financial Institutions Division, economist Mamun Rashid and business representative Abdul Haque from Haq's Bay as members, and Shahriar, director of Banking Regulation and Policy Department, as member secretary.
About the timeframe, she adds, there is no fixed deadline for the committee to complete its task. However, the members are entitled to a maximum of two remunerations per month for attending meetings.
Seeking anonymity, a central banker, who is on the panel, said they would rigorously scrutinise the extent of impact on ailing industries and businesses.
Simultaneously, they will analysis best global practices to rejuvenate worst-hit business entities in such a situation.
"After doing such job, they will make a set of proposals to the regulator, which will later take a final decision to reschedule defaulted loans. A circular to this end will also be issued," the BB official said.
Hailing the move, FBCCI administrator Md Hafizur Rahman says many industries and business units have been hit hard by multiple factors since the pandemic, forcing them to either reduce production or shut operations.
As a matter of fact, they became loan defaulters under the existing regulations.
"A private sector representative is included on the committee, meaning that the banking regulator has a good intention to revive sick businesses. I'm hopeful that it will find a business-friendly policy," the administrator added.
When contacted, Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank PLC, says the applications of the affected businesses need to be carefully scrutinised based on merit.
"If everyone comes and gets policy support, that won't be a good thing for banks. It'll rather put liquidity under immense pressure," he told the FE.
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