Regulatory Alerts2013-05-29
Added · Updated
BRPD Circular No. 06 : Loan Rescheduling
BRPD Circular No. 06 amends Section 2 of BRPD Circular No. 15 by replacing the time limits for rescheduling classified Fixed Term Loans, Short-term Agricultural loans, and Micro-Credit. For Fixed Term Loans, the maximum additional time limits for first, second, and third reschedulings are set at 36, 24, and 12 months for Sub-standard loans, and 24, 18, and 12 months for Doubtful or Bad/Loss loans, with a condition that default equal to six monthly or two quarterly installments reclassifies the loan as Bad/Loss. For Short-term Agricultural and Micro-Credit, the maximum repayment time limits are extended to two years for first rescheduling, one year for second, and six months for third. These amendments apply to all Scheduled Banks in Bangladesh and come into force with immediate effect.
Page 1 of 2 Website: www.bb.org.bd Banking Regulation & Policy Department Bangladesh Bank Head Office Dhaka
May 29, 2013 BRPD Circular No. 06 Date: ------------------------------ Jaistha 15, 1420 Chief Executives All Scheduled Banks in Bangladesh
Dear Sir, Loan Rescheduling Please refer to BRPD Circular No.15 dated September 23, 2012 on the captioned subject. In light of current credit conditions and the greater preponderance of longer term finance, following amendments have been brought into the circular:
- Section 2.c) of the circular will be replaced as under : “02. c) Time limit for rescheduling Fixed Term Loan: The loan which is repayable within a specified time period under a prescribed repayment schedule is treated as Term Loan. In case of rescheduling of any classified Fixed Term Loan, following time-limit may be added with the expiry date/repayment date of last installment to determine the repayment schedule which will be started from the date of rescheduling. If the loan is rescheduled after the expiry date, the following time-limit will be applicable from the date of rescheduling:
Frequency Classified as Sub-standard Classified as Doubtful Classified as Bad/Loss First Rescheduling Maximum 36 (thirty six) months Maximum 24 (twenty four) months Maximum 24 (twenty four) months Second Rescheduling Maximum 24 (twenty four) months Maximum 18 (eighteen) months Maximum 18 (eighteen) months Third Rescheduling Maximum 12 (twelve) months Maximum 12 (twelve) months Maximum 12 (twelve) months Conditions: During the rescheduled period all required principal and interest payments must be made. Rescheduled amount should be repaid in monthly/quarterly installments. If the amount of defaulted installments is equal to the amount of 6 monthly or 2 quarterly installments, the loan will be classified as Bad/Loss.”
Page 2 of 2 2. Section 2.d) of the circular will be replaced as under : “02. d) Time limit for rescheduling for Short-term Agricultural and MicroCredit: In case of rescheduling of any classified Short-term Agricultural and Micro-Credit, 6 months may be added with following time-limit from the day after the expiry date/repayment date of last installment to determine the repayment schedule which will be started from the date of rescheduling. If the loan is rescheduled after the expiry date, the following time-limit will be applicable: First Rescheduling Repayment time limit for rescheduling should not exceed 2 (two) years. Second Rescheduling Maximum 1(one) year. Third Rescheduling Maximum 6(six) months. This circular will come into force with immediate effect and all other instructions in BRPD Circular No.15 dated September 23, 2012 will remain unchanged. Please acknowledge receipt. Yours sincerely, (Md. Anwarul Islam) Deputy General Manager Phone-9530094
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