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2020-09-28

Added 2026-08-09 · Updated 2026-08-13

BRPD Circular No. 17: Loan Classification

This circular extends the moratorium on loan classification deterioration for loans classified as of January 1, 2020, until December 31, 2020, and mandates that installment payments due between January 1 and December 31, 2020, be treated as future installments with the schedule adjusted accordingly. It extends the maturity or restructuring date for current, demand, and newly arisen demand loans by up to 12 months or until December 31, 2020, whichever is earlier. The directive prohibits the transfer of interest/profit to income accounts, the imposition of penalty interest, or additional fees for loans benefiting from these measures, while repealing previous circulars BRPD No. 04/2020 and 13/2020.

Bangladesh

Bangladesh Bank

Ref: BRPD Circular No. 17 Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka. 28 September 2020

BRPD Circular No. 17 Date: -------------------- 13 Ashwin 1427

Managing Director / Chief Executive All Scheduled Banks operating in Bangladesh.

Dear Sir,

Regarding Loan Classification.

We draw your attention to BRPD Circular No. 04 issued on 19 March 2020 and BRPD Circular No. 13 issued on 15 June 2020 on the subject cited above.

Considering the negative impact of the Corona Virus in the country, instructions were issued through BRPD Circular No. 13/2020 regarding loan classification that loans which were classified as of 01 January 2020 shall not be classified in a worse manner than that during the period up to 30 September 2020. However, if the classification of any loan improves, it shall be classified according to the relevant rules. In addition, instructions were also issued through the said circular regarding repayment/restructuring of loans/investments, installments, etc.
Due to Covid-19, most sectors of the country have been affected and there is a fear that its negative impact will be long-lasting. Many industries, services, and business sectors are unable to carry out their normal operations. Considering the aforementioned circumstances and with the aim of keeping the negative impact of Covid-19 on the business of loan/investment borrowers within tolerable limits, the following instructions shall be followed regarding the determination of maturity/repayment schedule and classification of loans/investments:

a) Loans/investments which were classified as of 01 January 2020 shall not be classified in a worse manner than that during the period up to 31 December 2020. However, if the classification of any loan/investment improves, it shall be classified according to the relevant rules.

b) To comply with the instructions mentioned in Clause 3(a), installments due from 01 January 2020 to 31 December 2020 against existing term loans/investments (including short-term agricultural loans and micro-credits) as of 01 January 2020 shall be considered as future installments. In this regard, the amount and number of installments of the relevant loan/investment from January/2021 onwards shall be re-determined. During the re-determination period, the number of installments shall be increased by the same number as the installments that were due from January/2020 to December/2020. Even if any installment during the period from 01 January 2020 to 31 December 2020 is not paid, the borrower of the term loan/investment shall not be considered an installment defaulter for such installments.

c) The maturity/restructuring date of existing current and demand loans/investments as of 01 January 2020 and newly arisen demand loans/investments created during the period from that date to 30 September 2020 shall be extended from the existing maturity to 12 (twelve) months or 31 December 2020, whichever is earlier.

d) In the case of charging interest/profit on loans/investments during the period when the facilities mentioned in Clauses 3(b) and 3(c) are in operation, the existing policy regarding loan classification, rescheduling, restructuring under BRPD Circular No. 04/2015, and rescheduling/lump-sum exit facility for loans/investments under BRPD Circular No. 05/2019 shall remain in force. That is, interest/profit charged against loans/investments where Bangladesh Bank's regulations exist, excluding cash recovery, shall not be transferred to the income account. During the said period, no penalty interest or additional fee (however named) shall be charged on loans/investments.

e) If a customer does not feel the need to avail the aforementioned facilities, loans/investments may be restructured/repaid according to the pre-determined repayment schedule or based on the bank-customer relationship.

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f) To encourage customers who do not avail the special facilities mentioned in Clauses 3(a) to 3(c) to voluntarily pay installments of term loans/investments (including short-term agricultural loans and micro-credits) and restructure/repay current and demand loans/investments, banks may provide a joint rebate facility.

Further necessary instructions regarding the transfer of interest charged on loans/investments benefiting from the facility for installment payment/restructuring and the maintenance of provision against loans will be issued through this circular.
The instructions of the previously issued BRPD Circulars No. 04/2020 and 13/2020 are hereby repealed.
These instructions are issued under the powers conferred by Section 45 of the Bank Company Act, 1991.
These instructions shall come into force immediately.

Yours faithfully,

(Md. Nazrul Islam) Executive Director Phone: 9530252