BRPD Circular No. 11: Loan Classification

Bangladesh Bank (Central Bank of Bangladesh) Head Office Motijheel, Dhaka-1000 Bangladesh. Ref No.: BRPD-11 Banking Regulation and Policy Department BRPD Circular No.-11 20 June 2023 Date: ------------------ 06 Asharh 1430 To, Managing Director/Chief Executive Officer All Scheduled Banks operating in Bangladesh. Dear Sir, Context of Loan Classification.

1. Due to the ongoing international war, prices of raw materials and various inputs, as well as transportation costs, have increased in the international market. Borrowers are facing difficulties in paying the full amount of their due installments against the loans they have taken.

2. In view of the changing context, to keep all businesses running through the production and service sectors and to maintain liquidity in financial transactions, the following instructions are to be followed regarding loan repayment:

2.1. For existing non-performing term loans (including short-term agriculture and micro loans) as of April 01, 2023, if at least 50 (fifty) percent of the installment(s) due between April/2023 and June/2023 are paid by the last working day of June/2023, such loans will not be classified as non-performing in the June/2023 quarterly review.

3. The remaining amount of the installment(s) due for term loans up to June/2023, in accordance with the instructions mentioned in Section-02, shall be paid in equal installments or in a single installment within 03 (three) months after the expiry of the originally stipulated loan maturity period.

4. If loan repayment is not made in accordance with the instructions mentioned in Section-02, the loans will be subject to regular classification.

5. Through this circular, no penalty interest or additional fee (however named) shall be charged on loans benefiting from the concession regarding installment repayment for the period from April 1, 2023, to June 30, 2023.

6. The concession granted by this circular shall also apply to loans shown as non-performing through rescheduling.

7. Islamic Shariah-based banks may provide the aforementioned benefits by following the above policy guidelines in their investment sector.

8. The amount of interest/profit charged against loans/investments benefiting from this circular, which is to be collected in cash, may be transferred to the account.

9. These instructions are issued under the powers conferred by Section 49(1)(c) of the Bank Company Act, 1991, and shall come into force immediately.

Yours faithfully, (Md. Ali Akbar Farazi) Director (BRPD) Phone: 9530252