Regulatory Alerts2012-07-19
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BRPD Circular No. 11 Definition of Defaulted Borrower
The circular redefines "Overdue Loan" for determining a Defaulted Borrower under Section 5(GaGa) of the Banking Companies Act, 1991. Continuous loans become overdue the day after the expiry date, demand loans the day after expiry or demand, and unpaid installments of fixed-term loans the day after the due date. Short-term agricultural loans and micro-credit are considered overdue after six months from the expiry date. Any loan or accrued interest remaining overdue for more than six months classifies the borrower as a Defaulted Borrower, rendering BRPD Circular No. 10 void with immediate effect.
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