Shipbuilders get more time to regularise defaulted loans

Shipbuilders have been granted another two and a half months or so to reschedule their defaulted loans through a 2.5 per cent down payment, according to a Bangladesh Bank (BB) notice yesterday. 

The move comes a couple of days ahead of the expiry of a 90-day deadline set by the central bank in this regard in June.

In the June circular, the BB offered rescheduling the loans for a period of 10 years, which includes a two-year grace period.

However, a central bank official said a number of shipbuilders could not apply for regularising the defaulted loans.

"They are yet to be fully prepared to make the down payment and arrange required documents. So, based on their request, we have extended the scope for rescheduling loans until November 30 this year," said the official.

The central bank's measure comes against the backdrop of some banks putting up some shipbuilding and ship recycling yards for auction to recover loans.

Non-performing loans (NPLs) of the shipbuilding and ship breaking industry amounted to Tk 4,760 crore out of total outstanding loans of roughly Tk 21,220 crore as of December 2022. The sector's NPLs stood at 3.95 percent of the total defaulted loans in the country, according to the banking regulator's Financial Stability Report.

However, as far as the sector-wise rescheduled loans outstanding to total loans outstanding ratio was concerned, shipbuilding and ship breaking sectors ranked top with 33.8 percent in 2022.

They were followed by industrial, garment and textile and agriculture sectors, said the report.