Regulatory Alerts2024-09-01
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BRPD Circular Letter No. 39: Repayment/adjustment of loans of borrowers affected by recent floods
The Bangladesh Bank directs all scheduled banks to extend the repayment and restructuring deadlines for short-term agricultural and SME loans in flood-affected districts (Feni, Noakhali, Lakshmipur, Comilla, Chittagong, and others identified by the Ministry of Disaster Management and Relief) by three months for installments due between August and October 2024. Banks are prohibited from imposing any penalty interest, additional interest, or late fees on delayed payments resulting from this extension. These measures apply immediately to borrowers who have not yet been classified as non-performing, ensuring their credit accounts remain unaffected while facilitating financial relief.
Bangladesh Bank Chief Executive Office Motijheel, Dhaka-1000 Bangladesh. Ref No.: BRPD-Regulation & Policy Banking Regulation & Policy Department 01 September 2024 BRPD Circular Letter No. 39 Date: ------------------- 17 Bhadra 1431 Managing Director / Chief Executive Officer All Scheduled Banks Operating in Bangladesh Dear Sir,
In the context of facilitating the repayment/restructuring of loans of borrowers affected by recent floods,
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Extensive areas of several districts in the country have been inundated due to recent floods. Borrowers in flood-affected areas, particularly entrepreneurs in the short-term agricultural and SME sectors, have suffered losses, making it difficult for them to repay/restructure loans/installments within the stipulated time. If they are unable to make the required payments within the stipulated time, there is a risk that the loan accounts of affected borrowers in the targeted areas will be classified adversely. Consequently, this may negatively impact new credit flow and overall economic activities.
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In view of the above, to provide rehabilitation assistance to affected borrowers while maintaining their normal economic activities, the following instructions are to be followed for facilitating the repayment/restructuring of existing unclassified short-term agricultural and SME loans dated 01 August 2024 in flood-affected areas identified by the Ministry of Disaster Management and Relief, including Feni, Noakhali, Lakshmipur, Comilla, and Chittagong:
(a) Installments of term loans due between August 2024 and October 2024 for borrowers in the short-term agricultural and SME sectors must be repaid within 03 (three) months after the maturity of the respective loan;
(b) The restructuring period for all current loans in the SME sector that are eligible for restructuring between August 2024 and October 2024 must be extended by 03 months;
(c) If any customer does not agree to avail the facilities mentioned in clauses 02(a) and 02(b), the loan/loan installments may be repaid/restructured according to the previously stipulated repayment schedule; and
(d) Apart from regular interest on delayed payments, no other form of penalty interest/extra interest/extra profit/late fee/fine (however named) shall be collected/imposed.
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These instructions are issued under the powers conferred by Section 49(1)(c) of the Bank Company Act, 1991.
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These instructions shall come into force immediately.
Yours faithfully, (Mohammad Shahriar Siddique) Director (BRPD) Phone: 9530252