The Bank Chairmen Association or BAB has proposed obtaining special loan payment concessions and plans to submit it to the central bank for approval. However, amidst ongoing unrest and a cash-strapped depositor base—primarily due to a recent 5-day bank closure and withdrawal freeze—the additional loan payment concessions could exacerbate the existing liquidity pressures, according to several bank managing directors.
One experienced banker and MD of Mutual Trust Bank noted that banks are already struggling with the impact of concessions made during the COVID-19 pandemic and the Russia-Ukraine war. He argued that further concessions would only worsen the situation. Another banker and MD of a private bank stated that it would be illogical given that banks are already heavily indebted.
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