The Bangladesh Bank today relaxed its term loan repayment policy for non-bank financial institutions (NBFIs), days after it extended more time to the borrowers of banks to pay back loans.

Borrowers who have taken up term loans, leases or investments from NBFIs will not be classified as defaulters if they repay, by this year, at least 50 per cent of the instalments payable as of September, according to a notice of the central bank.

The rest of the instalments could be repaid on a monthly or quarterly basis within one year after the current repayment period of the loan.

On Sunday, the BB said borrowers of banks will be allowed to avoid being classified as a defaulter if they clear 50 per cent of their instalments payable in the final quarter of 2022 instead of 75 per cent previously.

The BB notice said NBFIs are facing difficulties in realising instalments on time as the cash flow to SMEs and large enterprises has been affected by various external factors.

Today's decisions have been taken to make paying instalments easier for the affected borrowers and bring dynamism to the economy and the business sector. 

The new policy would also be applied to the investments made by shariah-based financial institutions.

If borrowers fail to repay the loans, lease and investments within the new repayment schedule, they would be classified as per rules, said the BB. 

NBFIs can't levy any additional interest or fee on the borrowers for the extra repayment period.

The latest tenure extension came less than two weeks after the Federation of Bangladesh Chambers of Commerce and Industry, the country's apex trade body, pressed for a relaxed loan classification policy until June next year.

Economists, however, expressed concern about offering a relaxed facility on a wholesale basis in order to avoid its misuse.

Only small and medium-sized borrowers should have been allowed to enjoy the relaxed facility, they said.