Written by The Banking Post
Bangladesh Bank is set to allow commercial banks to independently reschedule unpaid loans of up to Tk 3.0 billion under mutual understanding with clients, in a move aimed at easing pressure on the regulator’s policy-support committee.
Sources at the central bank said the Banking Regulation and Policy Department (BRPD) is preparing a circular that will revise the loan rescheduling and restructuring guidelines issued in 2022. The new directive will delegate decision-making power to banks for borrowers with outstanding loans within the Tk 3.0-billion range, whether classified or unclassified.
Applications involving loans above Tk 3.0 billion—particularly those from businesses severely affected by factors beyond their control—will continue to be handled by a five-member committee formed by Bangladesh Bank.
Officials said the committee has already received around 1,200 applications but has been able to process only 500, prompting the regulator to ease the bottleneck by shifting smaller cases to banks.
A Bangladesh Bank official, requesting anonymity, said the move is designed to speed up the resolution of distressed borrowers’ appeals and provide timely regulatory support. “A circular is likely to be issued very soon,” the official confirmed.
Industry insiders noted that the upcoming circular may also revise down-payment requirements and extend grace periods, while asking borrowers to make partial repayments during the grace period to help banks maintain liquidity for depositors.
Syed Mahbubur Rahman, Managing Director and CEO of Mutual Trust Bank PLC, welcomed the plan, saying banks are in a better position to settle such cases based on their client relationships. However, he cautioned against misuse, pointing out that even non-defaulters and politically motivated individuals have begun seeking rescheduling benefits.
“The regulator’s intention is good, but the challenge is that businesses who are not truly in distress are also trying to take advantage of the facility,” he said.Banks May Get More Autonomy in Loan Rescheduling
Central bank plans to ease pressure by delegating cases up to Tk 3b
Bangladesh Bank is set to allow commercial banks to independently reschedule unpaid loans of up to Tk 3.0 billion under mutual understanding with clients, in a move aimed at easing pressure on the regulator’s policy-support committee.
Sources at the central bank said the Banking Regulation and Policy Department (BRPD) is preparing a circular that will revise the loan rescheduling and restructuring guidelines issued in 2022. The new directive will delegate decision-making power to banks for borrowers with outstanding loans within the Tk 3.0-billion range, whether classified or unclassified.
Applications involving loans above Tk 3.0 billion—particularly those from businesses severely affected by factors beyond their control—will continue to be handled by a five-member committee formed by Bangladesh Bank.
Officials said the committee has already received around 1,200 applications but has been able to process only 500, prompting the regulator to ease the bottleneck by shifting smaller cases to banks.
A Bangladesh Bank official, requesting anonymity, said the move is designed to speed up the resolution of distressed borrowers’ appeals and provide timely regulatory support. “A circular is likely to be issued very soon,” the official confirmed.
Industry insiders noted that the upcoming circular may also revise down-payment requirements and extend grace periods, while asking borrowers to make partial repayments during the grace period to help banks maintain liquidity for depositors.
Syed Mahbubur Rahman, Managing Director and CEO of Mutual Trust Bank PLC, welcomed the plan, saying banks are in a better position to settle such cases based on their client relationships. However, he cautioned against misuse, pointing out that even non-defaulters and politically motivated individuals have begun seeking rescheduling benefits.
“The regulator’s intention is good, but the challenge is that businesses who are not truly in distress are also trying to take advantage of the facility,” he said.
