BRPD Circular Letter No. 58: Transfer of interest to income account and maintaining provision against loans

Bangladesh Bank
Head Office
Motijheel, Dhaka-1000
Bangladesh.
Ref No.: BRPD/Policy/20-20-001/2022-23/100
Banking Regulation and Policy Department
31 December 2024

BRPD Circular Letter No. 58
Date: ------------------
16 Poush 1431

Managing Director/Head of the Central Office
All Scheduled Banks operating in Bangladesh

Dear Sir,

Reference is drawn to your attention to the BRPD Circular Letter No. 14/2022 and BRPD Circular Letter No. 51/2022 regarding the transfer of interest charged on relief loans and the maintenance of provision against such loans, and to the BRPD Circular Letter No. 53, dated 22 December 2022, issued on the relevant subject.

2. In the context of the outbreak of COVID-19, the Bangladesh Bank has issued instructions from time to time to facilitate loan repayment by affected borrowers. In that context, to maintain the financial foundation of banks in the future and to prevent the growth of non-performing loans, no previous instruction was issued to maintain additional general provisions at rates of 1%/1.5%/2% sector-wise against the accounts of relief loans for loan repayment facilitation.

3. Now, the obligation to maintain provisions held in the accounts of relief loans under BRPD Circular Letter No. 53/2022 and other circulars/circular letters is hereby revoked. The provisions previously held in these accounts may be transferred to the General and Specific Provision against Loans and Advances accounts.

4. These instructions are issued under the powers conferred by Section 45 of the Bank Company Act, 1991.

5. These instructions will take effect immediately.

Yours faithfully,

(Mohammad Shahriar Siddique)
Director (BRPD)
Phone: 9530252