The loan deferments for businesses affected by the COVID-19 pandemic are ending on the 30th of June. During today’s ‘Meet the Press’ session, the finance minister informed that the ministry and the central bank will not intervene, instead, let the banks assess the situation. According to Finance Minister Lekey Dorji, experts from various multilateral banks and local economists have advised the government against the deferment.
During recent consultation meetings with the Bhutan Chamber of Commerce and Industry (BCCI), business owners shared concerns that they have yet to bounce back from the downturn caused by the COVID-19 pandemic.
The BCCI president said that the office will request a deferment of another two to three years.
However, when speaking with the media, the finance minister expressed concerns that further deferment could dampen the country’s economy.
“Banks know their customers the best. The RMA and the government should not directly intervene unless it is genuinely required. According to the Macro Fiscal Coordination Committee study, loan portfolios that were deferred may not require further deferment beyond June 2024. But some sectors may need deferment, until December 2024,” said the finance minister.
He added that the study also suggested that all deferments should end by December this year. According to the minister, further deferments beyond December will negatively impact the country’s economy.
“However, it does not mean that there will be no deferment post-June 2024. All I am saying is there will be no blanket deferments, but the MoF and RMA will let financial institutions decide on loan deferments based on stringent assessment and even on the future of the tenure of deferment as indicated by the finding of the assessment with their clients working together.”
The financial institutions have nearly 150,000 loan accounts, amounting to over Nu 200bn.
According to the minister, out of the total loan accounts, about 13,000 accounts, totalling over Nu 55bn have been deferred so far.
The finance minister added that all financial institutions have to establish unified standard criteria to handle loan deferments.
Samten Dolkar
Edited by Sherub Dorji
