Written by The Banking Post
Bangladesh Bank (BB) in a major policy shift has relaxed regulations aimed at restoring the struggling business and financial operations of both classified and unclassified borrowers.
In a circular issued by banking regulation and policy department (BRPD) on Monday, commercial banks can offer special rescheduling facility for up to 10 years with two years of grace period to borrowers whose loans are classified as SS (substandard), DF (doubtful), or BL (bad/loss) as of November 30. Earlier, the timeline was June 30, 2025.
To avail the facility, the borrowers will have to pay 2 per cent of their outstanding loans as down payment. But the borrowers will not be allowed to show paid loan installments or its part before submission of the application as special down payment.
Regarding special loan restructuring facility, the BB circular stated that the unclassified borrowers facing problems can avail the facility up to December 31 next and the borrowers can get the facility for maximum two years of the scheduled timeline.
The central bank further eased special exit facility with allowing the classified borrowers to change their loan status to unclassified after being exited through the facility.
Simultaneously, the classified borrowers through the exit policy will now get non-funded facility like opening of Letter of Credits, according to the circular.
The central bank’s policy relaxation comes twelve days after the BB’s meeting with the bank executives where the central bankers asked the bankers to somehow control the mounting growth of NPLs (non-performing loans) through intensifying cash recovery drives.
The central bank officials concerned also ordered the bankers to implement the tool of policy supports to revive the ailing businesses, which will also help reduce the leaping classified loans buildups reeling the banking industry now.
In that meeting, the banking regulator led by its deputy director Dr. Md. Kabir Ahmed made the direction to the managing directors, chief executive officers and chief financial officers of the commercial banks at the meeting titled ‘The NPL Resolution’.