BRPD-1 Circular No. 05: Instructions to be Followed in Case of Continuous Loan Renewal

Bangladesh Bank
Head Office
Motijheel, Dhaka-1000
Bangladesh.
Ref: Banking Regulation and Policy Division-1
03 March 2026
BRPD-1 Circular No. 05 Date: ------------------ 18 Falgun 1432 Managing Director / Chief Executive Officer All Scheduled Banks Operating in Bangladesh Dear Sir, Regarding the instructions to be followed in case of continuous loan renewal Reference is invited to BRPD Circular No. 06 dated 25 June 2025 on the appropriate subject and BRPD Circular No. 15 dated 27 November 2024 issued regarding loan classification and provisioning.

2. Clause 5(d) of BRPD Circular No. 15/2024 defines "Working Capital Loan" (ঋণ) and Clause 6(d)(1) defines "Loan Maturity" (উপর্যুক্ত ঋণ). On the other hand, Clause 6(f)(r) of the same circular states that there is no opportunity to declassify a classified loan by partial repayment of the loan maturity. According to the instructions mentioned in the said clauses, working capital loans must be fully consolidated or renewed within the existing tenure. In this context, instructions to be followed in case of working capital loan renewal are provided through BRPD Circular No. 06/2025.

3. It is mentioned that Bangladesh Bank has come to know that in many cases, it is difficult to renew working capital loans within the existing tenure due to various uncontrollable reasons. Now, considering the overall economic context of the country and with the aim of keeping business and commerce running smoothly, the following instructions regarding working capital loan renewal are to be followed:

a) Working capital loans must be renewed within the existing tenure. In this regard, the renewal process (e.g., receiving customer application, documentation, etc.) must be started at least 2 months before the loan maturity. Even if the said process is started, if the loan cannot be renewed within the tenure due to uncontrollable reasons, the matured working capital loans may be renewed before being classified as substandard (ঘচখ). In this case, the reasons for not renewing the loan on time must be recorded;

b) In the case mentioned in 'a', the excess amount of the loan (if any) may be renewed subject to consolidation. In addition, the loan must be fully consolidated;

c) The excess amount of the working capital loan shall not be created as a new loan or transferred to any other loan account by separating it from the principal loan;

d) The instructions mentioned in this circular will remain valid until 31 December 2027.

4. The instructions provided through BRPD Circular No. 06/2025 shall be considered cancelled.

5. These instructions are issued under the powers conferred by Section 45 of the Bank Company Act, 1991, and will come into force immediately.

Yours faithfully,
(Md. Bazlur Rahman Sarkar)
Director (BRPD)
Phone: 9530252