Housing sector benefits most from loan waiver in April

Housing sector benefits most from loan waiver in April

The sector-wise interest waiver in April has benefitted the housing sector most compared to other sectors in the country.

The total interest waiver for the month of April amounted to Nu 1.2bn. There are nine sectors categorized for interest waiver. More than 136,096 loan accounts were benefited.  

A total of 16,460 loan accounts benefited in the housing sector with interest waiver amounting to Nu 314.90mn, followed by Service and Tourism sector with 4,186 loan accounts and interest waiver amounting to Nu 293.45mn.

Similarly, the production and manufacturing sectors with 2,443 loan accounts and trade and commerce sectors with 9,854 loan accounts also benefited with interest waiver of Nu 189.44mn and Nu 180.53mn respectively.

Around 47,874 personal loan accounts benefited with the interest amounting around Nu 108.05mn and Agriculture sector benefited a waiver of Nu 51.93mn with 13,545 loan accounts.

Likewise, 11,029 loan accounts benefitted in the education sector and 721 loan accounts with fixed deposit also benefited with a waiver of Nu 30.98mn and Nu 6.89mn respectively.

There are others sectors with 1,468 loan accounts that benefited Nu 21.02mn.

Interest Waiver for the month of April

From the total interest waiver for the month of April amounting to Nu 1.2bn, 50% amounting to Nu 625mn will be financed by the government and the remaining 50% amounting Nu 625mn will be borne by the financial services providers.

The principal outstanding amounting to Nu 153mn is eligible for interest waiver.There are 117,691 regular loan accounts eligible for interest waiver amounting to Nu100mn and 18,570 NPL loan accounts with the interest waiver amounting to Nu 244mn.

Financial institution specific total interest waiver

Among financial institutions, Bank of Bhutan Ltd (BOBL) with 30,512 loan accounts gave the maximum interest waiver amounting to Nu 320.07mn, followed by Bhutan National Bank Ltd (BNBL) with 15,744 loan accounts and interest amounting Nu 268.56mn.

In the same way, the Royal Insurance Corporation of Bhutan (RICB), Bhutan Development Bank Ltd (BDBL), National Pension and Provident Fund (NPPF), Druk PNB Ltd, T Bank Ltd, Bhutan Insurance Ltd gave an interest waiver to 5,452, 54,901, 16,310, 2,069, 6061 and 1,155 loan accounts holders respectively of Nu 190.44mn, Nu 173.13 mn, Nu 118.89 mn, Nu 92.12mn, Nu 61.44mn and Nu 18.40mn respectively.

Meanwhile, to provide immediate relief to indebted businesses and individuals throughout the country, the RMA has been working closely with the financial services providers in implementing several monetary measures including loan deferment and interest waiver for a period of three months (April to June).

Loan deferment and interest waiver are expected to provide relief to the borrowers, individuals as well as businesses, during the period of crisis.

The RMA in collaboration with the financial services providers has constituted two levels of committees in order to ensure smooth implementation of loan deferment and interest waiver.

However, Prime Minister Dr Lotay Tshering handed over the e-fund payment to financial service providers for loan interest waiver for the month of April on Thursday.

With the impact of the COVID-19 pandemic, both the financial institutions and the government is financing 50% of the interest waiver amounting to Nu 625mn each.

Lyonchhen said COVID-19 started as a health and education crisis but has now it has turned into an economic problem. “With standard operating procedures (SOP) are in place, we have averted a major health crisis for now,” he said.

“Given the size and informal nature of our economy, along with lack of accurate statistics, the nation faces a big challenge,” he said, adding this pandemic has taught a lesson on strategic and targeted way forward.

He added the banks have to rethink their banking models and devise innovative loan mechanisms seriously consider managing non-performing loans.

Kinley Yonten from Thimphu