Bangladesh Bank yesterday unveiled a new policy to provide good borrowers with incentives, including a 10 percent rebate on interests, in an effort to eliminate wilful loan default culture.
Before this, the central bank formulated various policies to rescue struggling big borrowers but never did they come up with any institutional policy to encourage good lending culture in Bangladesh, the central bank said in a notice. 
The move comes nearly two months after the central bank approved a restructuring policy for large borrowers, providing them a maximum of 12 years to repay loans above Tk 500 crore.
While justifying the policy for large borrowers at the time, Bangladesh Bank Governor Atiur Rahman disclosed plans to prepare a rebate policy to reward borrowers who have repaid their loans on time.
The central bank yesterday came up with the definition of good borrowers. Good borrowers must not have any classified loans in the last three years.
In case of current loans, if borrowers make regular repayment for three consecutive years, banks will have to provide a 10 percent rebate on interests at the end of third year.
Against demand loans, banks will have to provide the same rebate on the interests to be accrued from the credit on the third year.  In case of term loans, banks will have to provide a 10 percent rebate on the interests to be realised on the third year. 
All borrowers will continue to enjoy the waiver every year afterwards. Besides, banks can extend additional credit on demand. 
The central bank has made it mandatory for banks to provide the incentives to all its clients, a move which was well received by bankers. 
“It's a good policy. It will motivate borrowers to remain regular on their instalments,” said Anis A Khan, managing director of Mutual Trust Bank. “Although the profits of banks will reduce to some extent because of the policy, we will still welcome it,” Khan told The Daily Star, adding that the policy might help bring a positive change in reversing the growing trend of wilful default culture.  
Now banks will have to make their customers aware about the incentives for being a good borrower, he added.