Regulatory Alerts2015-02-23
Added · Updated
ACFID Circular No. 01: Regarding Certificate Case
The Central Bank of Bangladesh directs state-owned commercial and specialized banks to reduce certificate cases and recover non-performing agricultural loans by withdrawing or settling filed cases through compromise agreements, preventing loans from becoming time-barred via mutual consent, and strengthening monitoring and dedicated recovery units. Banks are required to raise farmer awareness, facilitate easy installment repayments for at-risk loans, provide relief for farmers affected by natural disasters, and reward regular payers to encourage timely repayment. These measures are to be implemented immediately, with monthly progress reports submitted to the Agricultural Credit and Financial Inclusion Department.
Bangladesh Bank (Central Bank of Bangladesh) Head Office Motijheel, Dhaka-1000 Bangladesh 11 Falgun, 1421 ACFID Circular No.-01 Date: ------------------- 23 February, 2015 Managing Director / Chief Executive State-owned Commercial and Specialized Banks Dear Sir, Regarding Certificate Cases. In light of the decision taken in the meeting held at the Head Office of Bangladesh Bank on 16/02/2015 regarding the reduction of certificate cases and alternative methods/methods for recovering unpaid agricultural loans, the following programs are advised to be properly implemented:
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Take measures to withdraw or settle cases filed through compromise agreements/settlements (Solamnama) prior to regularizing defaulted loans, and inform the Agricultural Credit and Financial Inclusion Department of Bangladesh Bank on a monthly basis about the progress made in this regard;
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To prevent certificate cases, take measures to prevent loans from becoming time-barred through mechanisms such as mutual consent between bank and customer, acknowledgment of debt, part payment, etc., so that the number of certificate cases does not increase in the future;
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State-owned commercial and specialized banks should strengthen monitoring of the recovery of all agricultural loans, including classified loans, and form separate recovery cells/units if necessary;
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Arrange necessary measures and meetings/seminars to raise awareness among farmers on the ground regarding the importance of use and repayment of agricultural loans and the severity and consequences of cases;
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Identify signs of loans becoming time-barred and arrange for regularization through easy installment recovery;
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Take measures to suspend recovery of agricultural loans, provide new loans, or provide rescheduling facilities to farmers affected by natural disasters; and
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Take measures to reward and publicize farmers who regularly repay loans, and implement programs to encourage and motivate other farmers to repay loans.
These instructions will be implemented immediately.
Yours faithfully, (Prabha Chandra Mallick) General Manager Phone: 9530138 Agricultural Credit and Financial Inclusion Department