BB offers exit policy for non-textile sick factories

Finally, non-textile sick factories have got a bailout package from the central bank.

Bangladesh Bank in a circular on Wednesday said a non-textile sick factory having an original loan (principal amount) of at least Tk 50 lakh will be able to avail of the facility by giving a minimum of 2.5 of the principal amount as a down payment.

Under the policy, a bank can give a borrower at best three years to pay off the loans in installments, according to the central bank.

However, if a bank needs to adjust the loans by selling the borrower’s immovable properties, the borrower can be given a one-time chance to clear the loan within the stipulated three years’ time, says the BB circular.

But the loan must remain classified unless it is totally paid, says the BB.

About the waiver on interest, the BB said the decision has to be taken by the board of directors of respective banks.

Borrowers who want to avail of the facility have to apply within 90 days of the issuance of this circular and a bank has to settle the application within 45 days.

Earlier in January this year, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) sought the prime minister's intervention to save the sick non-textile factories.

The Awami League-led government in 2009 formed a high-powered task force to rehabilitate the sick industry and devise mechanisms to settle their liabilities.

The task force made sick factories into three categories - garments, textiles and non-textiles.

Later, the government issued circulars to settle the liabilities of 279 garment factories and 100 textile factories as per the recommendations of the task force. But no non-textile factory has this facility yet.