BRPD Circular No. 07: Enhancement of Working Capital Limit

Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka. Ref No.: BRPD-14/14/2022-07 BRPD Circular No. 07 Date: ------------------- 27 April 2022 14 Bangabda 1429

To, Managing Director/Chief Executive Officer All Scheduled Banks Operating in Bangladesh.

Dear Sir,

Regarding the enhancement of working capital credit limits.

In the recent global economic context, there has been an increase in the prices of various inputs, including raw materials, in international markets, as well as an increase in transportation costs, leading to a rise in production costs. Consequently, despite the maximum utilization of approved working capital credit limits by scheduled banks, borrowers are unable to meet the required payment for raw materials and complete production programs as per demand. This has disrupted the production process. As a result, there is a risk of hindering the momentum of ongoing economic transactions, including imports and exports.

2. In this commercial context, to keep production programs ongoing and maintain the momentum of overall economic transactions in the country, including imports and exports, you are hereby directed to temporarily enhance the approved working capital credit limits for borrowers as per their needs. This enhancement should be based on the bank-customer relationship, with credit risk mitigation/reduction, and by increasing the level of verification of the customer's financial capacity.

3. This directive is issued under the powers conferred by Section 45 of the Banking Company Act, 1991.

This directive shall take immediate effect.

Yours faithfully,

(Maksuda Begum) Deputy General Manager Phone-9530252