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Posted On: 22 September 2009 04:15 pm
Updated On: 12 November 2020 02:10 pm

Banks’ loan deferment plan criticised

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The decision of some banks here to reduce loan deferment from four times a year to twice a year has not gone well with customers. Under financial pressure due to summer holidays, Ramadan, Eid Al Fitr and the back-to-school season coinciding this year, some families feel banking services bereft of humanitarian considerations are uncalled for. “It’s time the banks included in their corporate social responsibility these considerations as well,” says a Qatari national who doesn’t want his identity disclosed. There are limited-income families which are finding it hard to pay the monthly loan repayment installments for October due to financial strains on account of so many events coinciding this year. There are also many families that wish their loan repayment installments could be deferred in November too, but banks are insisting that they cannot defer a loan repayment more than the prescribed limit during a year. “My bank was deferring loan repayment installments four times a year. However, when I requested them not to deduct the installment next month, I was told that it was not possible since I had already got the deferment this year twice,” said another national asking not to be named. He said since he was the lone bread-winner for his large family with two school-going children, he was left wondering how he would pay for the books and tuition fees for his son and daughter, besides meeting routine household expenses. “I am not the only one facing this problem. There are a large number of families with limited resources who are in a dilemma and don’t really know how they would manage their meagre finances due to indifference of banks,” he said. Banking industry sources say the deferment policy varies from one bank to another and if one bank was so liberal as to allow loan repayment deferment four times a year, it had every right to review its decision and halve its frequency, especially as these are challenging times for the banking industry worldwide in view of the global economic crisis. A bank in Qatar generally defers loan repayment twice a year. There are some banks which allow deferments only once a year, that too, during the entire tenure of a loan, said sources.