BRPD Circular Letter No. 43: Avoidance of the increasing trend of rate of interest on existing loan account

Ref No: BRPD-BPD-Pol-1 Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka. 31 August 2020 BRPD Circular Letter No. 43 Date: ------------------ 16 Bhadro 1427 Managing Director / Chief Executive All Scheduled Banks operating in Bangladesh. Dear Sir, Regarding the avoidance of the increasing trend of rate of interest on existing loan accounts. We draw your attention to BRPD Circular No. 05 dated 30 May 2018 on the subject cited above. 2. Through the aforementioned circular, certain instructions were issued to prevent banks from arbitrarily setting higher interest rates on existing loan accounts in addition to approving new loans, to maintain loan discipline, and to avoid the risk of creating new non-performing loans. Now, in the context of BRPD Circular No. 03 issued on 24 February 2020, which set the maximum interest rate at 9% for all unrated loans other than credit cards from 01 April 2020, the instructions provided through BRPD Circular No. 05/2018 are hereby rescinded. These instructions shall be effective from 01 April 2020. These instructions are issued under the powers conferred by Section 45 of the Bank Company Act, 1991. Yours faithfully, (Md. Nazrul Islam) Deputy General Manager Phone: 9530252