[ad_1]
Thupten Sangpo
Private sector business representatives are calling for an independent committee to assess who gets loan repayment deferrals after the government gave banks the power to decide who gets and how.
Bhutan Chamber of Commerce and Industry president Thandi Wangchuk said an independent committee could develop a standard operating procedure for loan extensions. Given the recent transfer of responsibility for loan repayment deferrals from the government to individual banks, there are reservations that many borrowers will not be eligible for loan deferrals.
The extension of Monetary Measures IV was led by the Treasury and implemented in consultation with the Royal Monetary Authority (RMA) and the private sector, many of which can recover from the extension strategy.
“The loan extension initiative must be led by the government, through proper dialogue with the private sector, RMA and other relevant stakeholders,” the President said.
He added that if the power to extend loans is only given For the banks, they will not take care of the welfare of the borrowers. He said that banks Profits have been made through high loan interest rates over the past 10 to 15 years.
The Association of Financial Institutions of Bhutan yesterday informed borrowers who wish to apply for extension to fill in the loan extension form and submit it latest by 5 pm on June 30 this year.
The current loan deferral period will end on June 30 this year.
Financial institutions will assess eligibility for deferral applications and notify borrowers. Borrowers who have not submitted deferral applications will receive a deferral.
Additionally, equity loans and home loans are not eligible for deferrals.
Bank officials said financial institutions will provide loan deferrals of six months to a year for borrowers facing genuine financial difficulties.
However, individual financial institutions will approve payment deferrals based on a comprehensive assessment of the customer’s specific circumstances.
Bankers said the assessment will be strict and take into account factors such as the borrower’s revenue, hotel occupancy rate and overall business performance.
Borrowers with significantly insufficient or reduced income can apply for a deferral of six months to one year.
Hotels, especially those with occupancy rates below 35%, may be considered for extensions.
Tandi Wangchuk says When businesses were in a downturn over the past three years, a one-year loan deferral would have provided a great relief.
“Business revenue alone is not enough to assess loan extensions,” he said, adding that there should be data on how many businesses have recovered and lost or retained employees.
Tandy Wangchuk believes that banks will assess the past revenue performance of companies. However, he said that the government has formulated an economic stimulus package (ESP) of 15 billion Ngultrum to achieve The arrival of 300,000 tourists and the implementation of the 13th Five-Year Plan will promote local economic development.
The chamber of commerce, representing the business community in 10 Tsongkhapa districts, submitted a letter to the prime minister on May 21, requesting The government’s IV intervention measure is due to end next month.
“The majority of businesses indicated that they were unable to repay their loans in full due to ongoing economic pressures,” the letter to the prime minister reads.
To promote business continuity, Thandi Wangchuck said loan extensions are critical to the survival of Bhutanese households, small and medium-sized businesses, and to mitigating the risk of large-scale defaults and bankruptcies.
The chamber also asked the government to provide a 2% incentive for businesses that are able to start repaying their loans. “This will improve bank liquidity while encouraging responsible repayment behaviour,” said Thandi Wangchuk.
At the same time, businesses also requested a review and relaxation of the 91-day cap on loan accounts becoming non-performing loans (NPLs), and a revision of the NPL threshold for financial institutions from 5% to 8%.
[ad_2]
Source link
