Purposes for Rescheduling:
(i) To provide for borrower’s changed business condition
(ii) For better overdue management
(iii) For amicable settlement of problem accounts
Cases for Rescheduling:
Rescheduling would be considered only under the following cases-
(i) Overdue has been accumulated or likely
to
be accumulated due to change in business conditions for internal
or
external factors and
the borrower is no way able
to
pay up the entire accumulated overdue in a single
shot.
(ii) The borrower should be in operation and the assets have a productive value and
life
for servicing the outstanding liabilities.
(iii) The borrower must be capable of and willing to pay as per revised
arrangement.
Modes of Rescheduling:
Rescheduling can be done through adopting one or more of the following means.
(i) Extension of financing term keeping lending rate unchanged
(ii) Reduction of
lending rate keeping financing term unchanged (iii)
Both reduction of
lending rate and extension of financing term (iv) Bodily shifting of payment schedule
(v) Deferment of payment for a short-term period with or without extending the maturity date (this may be a temporary relief to prevent the inevitable collapse of a
company).
However, under any circumstances reschedule period must not exceed economic life of
the
asset.
Analysis of Rescheduling Case and
decision on different
modes of rescheduling:
An account, which has been going through liquidity crisis, may be considered for
rescheduling after identifying symptoms, causes and magnitude of the problem. For
rescheduling an account, the criteria mentioned in Bangladesh Bank guideline, if any has to be followed strictly.
Post Rescheduling Requirements:
Rescheduling of
a contract must require prior approval of CRM and
management
All rescheduled accounts are
to
be kept in a separate watch list
so
that post rescheduling performance of the accounts can be monitored closely