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Bangladesh Bank (BB) has further expanded the scope of policy support available to classified loan borrowers.
All loans classified as adverse (defaulted) on upcoming November 30 will now be eligible for rescheduling under a special facility. This new concession aims to help restructure the business and financial framework of distressed institutions.
The central bank's Banking Regulations and Policy Department (BRPD) issued a circular in this regard on Monday, November 24.
Extended Tenure and Grace Period:
The new directive states that classified loans as of November 30, 2025, can be rescheduled for a maximum term of ten (10) years, with the provision to include a maximum two-year grace period. This means that borrowers with loans classified within the specified timeframe will be eligible for the new policy's rescheduling benefits.
Relaxation for Unclassified and Restructuring Loans:
Special Restructuring: Concessions have also been extended for unclassified term loans. These loans, including those previously rescheduled, can now be restructured by setting an additional maximum maturity period of two (02) years beyond the term described in the BRPD Circular No. 16/2022.
Special Exit Facility Changes
New flexibility has been introduced for the special exit facility as well:
Extended Period: Alongside taking the down payment as per previous instructions (BRPD Circular No.-13/2024), the duration of the exit facility can be extended by an additional one (01) year.
Repayment Obligation: While the rule for monthly or quarterly installment payments remains, the total annual repayment must not be less than 20 per cent of the total loan amount.
Classification: During this period, the loans must be displayed as 'Exit (SMA)' (Special Mention Account), and the required General Provision must be maintained.
Provisions: Specific Provision maintained previously cannot be transferred to the bank's income account without actual realization, although a part of it can be transferred for maintaining General Provision.
Restrictions on New Loans: No new loan facilities can be granted to the institution until the entire loan is fully paid off.
Failure to Pay: If the borrower fails to pay three monthly or one quarterly installment, the loan must be classified in the usual manner.