Bangladesh Bank on Tuesday allowed banks to extend special rescheduling, restructuring, and exit facilities to borrowers who defaulted due to circumstances beyond their control, aiming to revive viable enterprises, protect depositors, and reduce stress in the financial sector.
According to the circular issued on Tuesday, loans classified as sub-standard, doubtful, or bad/loss as of June 30, 2025, may be rescheduled for up to 10 years with a maximum two-year grace period.
A minimum 2 per cent cash down payment is mandatory, rising by an additional 1 per cent if the loan has already been rescheduled three times or more.
Applications must be submitted by December 31, 2025, and resolved within six months of acceptance.
The circular, however, made clear that no facility would be available to wilful defaulters, fraudulent borrowers, or loans created through irregularities.
Before providing the facility, banks must carefully assess repayment capacity through internal audit and risk management units, or by using external auditors approved by Bangladesh Bank.
Banks must obtain board approval for all facilities but need not seek Bangladesh Bank鈥檚 prior clearance, except when directors or related parties are involved.
Installments may be set monthly or quarterly, and preferential interest rates can be offered 鈥� up to one percentage point lower than the sector鈥檚 minimum rate.
However, previously paid installments cannot be count with the down payment, and no suspended interest can be transferred to聽 bank income without actual recovery.
Banks must classify these rescheduled loans as 鈥楽pecial SMA鈥� and maintain general provisioning.
If borrowers miss three monthly installments or one quarterly installment, the loans must be reclassified under standard provisioning rules.
New loans cannot be sanctioned unless the compromised amount is paid, though fresh credit may be allowed after reviewing the borrower鈥檚 financial conduct.
The central bank said many investment and employment-generating firms became defaulters before the August 2024 political transition because of external shocks, discriminatory treatment by banks, utility delays, supply chain disruptions, and unexpected currency depreciation.
To support these firms, banks have been instructed to provide 鈥榩olicy assistance鈥� under strict terms.
Special support has also been introduced for companies hurt by exchange rate shocks in 2022 while importing raw materials under deferred or UPAS letters of credit.
Banks must calculate losses following earlier guidance and may extend repayment schedules accordingly.
In addition, unclassified term loans 鈥� including those already rescheduled 鈥� may be restructured for up to two extra years beyond their normal tenure.
Similarly, under a 鈥榮pecial exit鈥� facility, banks can grant an additional one-year period, subject to down payments in line with earlier circulars.
Large borrowers with loans exceeding Tk 300 crore will require interbank consultation or referral to a policy support committee if banks cannot decide internally.
Facilities must also be reported to the Credit Information Bureau under special categories such as Special RSDL, Special RSTR, or Special Exit until loans are fully repaid.
The circular demanded suspension of ongoing lawsuits within 90 days of granting facilities, provided borrowers honour repayment schedules.
If terms are breached, benefits will be revoked and legal recovery will resume.
