The amount payable works out to Nu 109.12M
Yangchen C Rinzin
The government will, on behalf of the youth who went to Japan on the Learn and Earn Programme (LEP), pay the interest for the loans they availed from Bhutan Development Bank Limited (BDBL) and Royal Insurance Corporation of Bhutan Limited (RICBL).
Handing over the E-fund letter for LEP to the two banks yesterday, Prime Minister Dr Lotay Tshering said that His Majesty The King had granted Kidu and waived off the interest on the loan for 743 youth.
Lyonchhen said that the government would instead pay the interest payable to both the banks and the interest on the loans would be waived off with immediate effect.
His Majesty has also granted special Kidu of waiver of both the interest and the principal amount for three of the 743 youth under the LEP. While two youth passed away, Sonam Tamang, is still on life support in a hospital in Japan.
The loan accounts of these three youth will be also considered as closed as of March 15.
Lyonchhen said that the interest would be waived off for all the 740 youth immediately and youth would have to repay only the principal outstanding.
Presenting the financial implication that was worked out with the Royal Monetary Authority, Finance Secretary Nim Dorji said that government would have to pay interest of Nu 109.12 Million (M) to both the banks.
The secretary added that the amount also includes the loan interest and principal amount waived off for three youth.
Secretary Nim Dorji said that 743 youth had availed more than 511M loan under the LEP loan scheme from two banks to study and earn in Japan.
A total of 677 youth availed a loan amount of Nu 700,000 each from BDBL for a term period ranging from five to nine years. A total of 66 youth availed a loan of Nu 600,000 from RICBL for a period of five years.
Both the banks lent the loans at an interest of eight percent.
Secretary said that some youth have been repaying the loan and for this, the interest amount paid will be now adjusted with the principal amount. The youth will have to repay the remaining outstanding principal amount.
Each youth had to pay interest ranging from Nu 151,000 to Nu 284,000 based on the loan term.
However, of the 743 youth, a total of 88 youth have closed their accounts meaning they have paid the entire loan amount with both the banks. This youth will receive back the interest amount they have paid.
Prime Minister said that the government is preparing to bring in Sonam Tamang from Japan by March and the expenditure amounting to USD 14,000 would be born by the government. “Both the banks should work on how to repay the principal amount and implement without any issue as soon as possible.”
The LEP was initiated in 2016 where 743 youth left for Japan through an agent called Bhutan Employment Overseas. However, the programme was faced with challenged after the youth alleged the agency of corruption practices. The case was also reported to Anti-Corruption Commission.
The youth were struggling to repay the loan. The government to solve the issue initiated the loan deferment last year, however, the loan could not be waived off, as requested.
Police also arrested the two owners after youth filed a complaint against agency. Police forwarded the case to Office of Attorney General (OAG) and the case is now with the Thimphu dzongkhag court where the proprietors of BEO are charged for 2,887 counts of forgery.
Meanwhile, parents of the youth thanked His Majesty The King for the kidu. “We are grateful to HIs Majesty’s magnanimous and most gracious kidu granted to our children and their parents,” said a parent.