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Fresh borrowers will have to pay interest on all kinds of loans as usual for April and May, according to a Bangladesh Bank, or BB, notice on Monday.
All the banks have been asked to transfer interest income to a separate account on the basis of outstanding figures on March 31, considering the setbacks, unleashed by coronavirus contraction.
On Sunday, the central bank asked the banks to move their interest on loans to a separate account for the two months on the same ground.
The banks will have to transfer the interest income from April 01 through May 31 to an interest-free block account, which will not be recovered from the borrowers, the BB said in its earlier notice.
Besides, the banks are not allowed to transfer the blocked accounts' interest from borrowers to the lenders' income book until further notice.
Talking to the FE, a BB senior official said the banks will have to transfer their interest income for the two months to such an account on the basis of outstanding on March 31.
"We've offered the policy support to the businesses that have already been affected by the coronavirus outbreak," the central banker noted.
Fresh borrowers will be able to pay their interest on loans because their businesses are running, he added.
Meanwhile, bankers have expressed their concern over imposing restrictions on transferring the interest income to the interest-free block account, saying that it will hamper cash-flow of the banks in near future.
"It will impose additional pressure on the banks' profitability as well as balance sheet management if the next decision is not taken properly," Mehmood Husain, managing director and chief executive officer of NRB Bank Limited told the FE.
The senior banker urged the central bank as well as the government for providing policy support to the banks for improving their financial health.
Meanwhile, the profitability of banks dropped drastically in April from the previous month after the implementation of 9.0 per cent interest rate on all loans, except for credit cards.
"Most of the banks may face negative profitability by the end of this calendar year if the existing crisis prolongs," a senior executive of a leading private commercial bank feared.
The private banker also said the banks may fail to maintain required provisioning against their loan portfolios as well as maintaining capital needed to comply with the Basel-III framework.