Businesses seek easing of lending rate, loan classification criteria

Bangladesh's apex trade body seeks urgent regulatory interventions like lowering interest rate, relaxing the tightened loan-classification rules and policy supports to affected businesses to breathe life into sagging economic activity.

The proposals of the Federation of Bangladesh Chambers of Commerce and Industry (FBBCI) are meant for overcoming the prevailing sluggish economic activity.

A delegation of the FBBCI, led by its administrator Md. Hafizur Rahman, shared those proposals in their meeting Sunday with Bangladesh Bank (BB) governor Dr Ahsan H. Mansur at its headquarters and sought immediate regulatory intervention to reinvigorate business and economy.

Apart from shocks stemming from the Covid-19 pandemic and Russia-Ukraine war, the business leaders have pointed out that production and transportation costs have gone up significantly because of factors like various geopolitical along with internal and external issues, which badly impacted overall business-operational costs, according to meeting- insiders.

Emerging from the parley, FBCCI administrator Md. Hafizur Rahman said the country needed to stabilise the interest regime for the sake of competitiveness of Bangladeshi products on the overseas market under the current global macroeconomic orders.

"We requested the central bank governor to take regulatory steps to reduce the interest rate gradually," he told the reporters just couple of weeks before the announcement of the Monetary Policy Statement (MPS) for the last half of this fiscal year.

Simultaneously, they proposed to the governor for relaxing existing loan-classification policy by taking current business scenario into consideration.

Under the latest policy, the FBCCI administrator said, lenders will treat a loan as overdue if a borrower does not make an installment payment within three months after the due date of repayment in place of previously practiced six months.

"We requested the regulator to ease the policy extending the timeframe for nine months instead of three months," he said.

Mr Rahman said the central bank needs to extend its policy supports to industries and commercial entities that have badly been affected by the anti-business factors. "Loan-rescheduling facility and lending facility on easier terms can be considered to this effect."

Apart from stabilising the forex market, he said, there are many entrepreneurs who have fallen victim to massive appreciation of the US dollar against the Bangladeshi taka. The regulator should provide them policy supports so that they can overcome the exchange rate-related losses.

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