BRPD Circular No. 13: Rescheduling of Short Term Agricultural & Micro Credit and Cottage & Micro Credit of SME Sector Affected by Recent Flood

BRPD Circular No. 13 Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka. August 22, 2017 BRPD Circular No.- 13 Date: -------------------- Bhadra 7, 1424 Managing Director/Chief Executive All Scheduled Banks operating in Bangladesh. Dear Sir, Regarding the rescheduling of short-term agricultural and micro credit and cottage and micro credit of the SME sector affected by recent floods.

Large areas of the country have been submerged due to recent floods. Borrowers in flood-affected areas, especially farmers and cottage and micro entrepreneurs in the agriculture and SME sectors, have suffered extensive losses, making it difficult for them to repay loans within the stipulated time. Furthermore, due to the suspension of income-generating activities caused by the floods, it will not be possible to extend the loan tenure by making down payments at the stipulated rate according to existing policies. Consequently, loans in the aforementioned sectors may be classified adversely, hindering new loan flows and causing stagnation in economic activities. In view of the prevailing situation, the following decisions have been taken to assist affected borrowers in rescheduling short-term agricultural and micro credit and cottage and micro credit of the SME sector, while maintaining their normal economic activities and providing rehabilitation support:

1. Short-term agricultural and micro credit and cottage and micro credit of the SME sector may be rescheduled with relaxed down-payment requirements on a case-by-case basis based on banker-customer relationships;
2. A grace period of up to 6 months may be provided for the rescheduling of such loans, based on banker-customer relationships;
3. To ensure that farmers and cottage and micro entrepreneurs in the SME sector affected by floods can receive new loan facilities on time based on actual need, new loan facilities may be provided after rescheduling without requiring any collateral (security deposit);
4. Loans may be rescheduled if litigation (if any) is stayed or settled through compromise (compromise deed).

Except for the aforementioned directions, other directions in BRPD Circular No. 15/2012 and 06/2013 shall remain unchanged.

This directive shall be implemented immediately, and the aforementioned rescheduling and new loan provision facilities after rescheduling shall remain valid until June 30, 2018.

Yours faithfully, (Abu Farah Md. Naser) General Manager Phone: 9530252