Regulatory Alerts2022-04-19
Added
BRPD Circular No. 05: Rescheduling of Short-term Agricultural Credit
The circular permits banks to reschedule short-term agricultural loans with a grace period of up to six months and a tenure of up to three years, allowing for zero down payment in specific cases. Borrowers may access new loans without fresh collateral after rescheduling, and settlement agreements can be used to reschedule loans involved in certificate execution suits. These measures are effective immediately and remain valid until December 31, 2022.
Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka. Ref No.: BRPD-05/01/05/2022-78 BRPD Circular No.-05 April 19, 2022 Date: ------------------- 06 Baisakh 1429
Managing Director / Chief Executive All Scheduled Banks operating in Bangladesh.
Dear Sir,
Regarding the rescheduling of short-term agricultural credit.
We draw your attention to BRPD Circular No.-15 issued on September 23, 2012, and BRPD Circular No.-06 issued on May 29, 2013.
- In the recent global economic context, due to the increase in prices of various agricultural inputs and transportation costs in international markets, their import prices have increased. To prevent the price increase of agricultural products in the domestic market, there is a need to bring more dynamism into the production activities of entrepreneurs in this sector. In view of the changing situation, to facilitate loan repayment by entrepreneurs in the agriculture sector and to maintain normal loan flow in the aforementioned sector, the following instructions will be followed regarding the rescheduling of short-term agricultural credit:
(a) The percentage requirement for accepting down payment based on banker-customer relationship shall be relaxed, and short-term agricultural credit may be rescheduled for a maximum tenure of 3 (three) years along with a grace period of 06 months from the date of rescheduling. In special cases, such loans may be rescheduled without any down payment;
(b) After rescheduling of loans, borrowers in the aforementioned sector may be granted new loans again without depositing any new collateral;
(c) During the pendency of certificate execution suits, loans pending resumption/settlement through amicable settlement (compromise) with the customer may be rescheduled; and
(d) The aforementioned benefits shall also apply to short-term agricultural credits that have been previously rescheduled.
- Except for the aforementioned instructions, other instructions of BRPD Circular No.-15/2012 and BRPD Circular No.-06/2013 shall remain unchanged. These instructions shall come into force immediately and shall remain in effect until December 31, 2022.
These instructions are issued under the powers conferred by Section 45 of the Banking Company Act, 1991.
Yours faithfully,
(Maksuda Begum) Deputy General Manager Phone-9530252