The Bangladesh Bank on Monday extended the application submission deadline for loan rescheduling on easy terms for the tannery owners by three months. The central bank on the day issued a circular in this regard, asking the country’s rawhide businesses to file applications with their respective banks by October 30 this year for enjoying the facility. Earlier the BB had set July 30 as the deadline. Under the rescheduling facility introduced on July 5 this year, the banks, based on their relationship with their customers, are allowed to reschedule loans granted to the tannery owners upon receiving 2 per cent of the businesses’ outstanding amounts as down payment. The facility was introduced as many tannery owners faced disruption in business activities amid the coronavirus outbreak in the country and lost their capacity to purchase rawhides ahead of Eid-ul-Azha, one of the largest religious festivals of the Muslims. Leather sector businesses collect 50 per cent of their annual raw materials during Eid-ul-Azha when Muslims sacrifice animals. Ahead of the festival, state owned banks — Sonali, Agrani, Rupali and Janata — have allocated Tk 586 crore for the leather traders. In 2019, the four state-run banks disbursed around Tk 655 crore to 23 tannery owners besides providing tannery factories with the loan rescheduling facility. The state-run banks have also sought a refinance fund from the government for the leather traders so that the businesses can purchase rawhides during and after Eid-ul-Azha. They have demanded 50 per cent of the total loans, which the banks would disburse to the leather sector, from the government as a refinance fund. They have also proposed that the rate of interest of the fund be set at 7 per cent. Of the interest, borrowers would bear 4 percentage points and the government would bear the rest 3 percentage points as subsidy.
