DFIM Circular No. 10: Regarding Loan Rescheduling of Shipbuilding Industry

Department of Financial Institutions and Markets Bangladesh Bank Head Office Dhaka.
Ref No: D.F.I.M.M.D.
DFIM Circular No. 10
Managing Directors / Chief Executive Officers
All Financial Institutions operating in Bangladesh.

Dear Sir,

Regarding the rescheduling of loans/leases/investment accounts of shipbuilding industries.

In order to achieve sustainable development of the shipbuilding industry, increase export earnings and employment, and gradually reduce import dependency to improve the country's economic and social conditions, the government has formulated the "Shipbuilding Industry Development Policy 2021". However, due to various reasons beyond regulatory control, the cash flow of export-oriented and local shipbuilding industries has been adversely affected, and it has been observed that in some cases, installment payments cannot be made on time. In such circumstances, there is a need to facilitate the loan repayment process of distressed customers to reduce long-term overdue loans and the volume of classified loans. In this context, the following facilities may be provided to each case after due consideration of the merits and demerits, based on the financial institution-customer relationship, upon application from distressed export-oriented and local shipbuilding industries:

a) For existing loans/leases/investments as of June 30, 2023, in the aforementioned sector, two separate accounts must be created for interest and principal respectively;

b) The balance for interest must be transferred to an interest-free bank account, and the financial institution may charge interest on the principal amount according to prevailing rules;

c) The aforementioned loans/leases/investments may be rescheduled for repayment over a total of 10 years, including a 2-year grace period;

d) Principal repayment must begin after the completion of the grace period. Subsequently, the interest maintained in the bank account will be recovered. However, if a customer wishes, they may also pay the outstanding principal and interest during the grace period;

e) A minimum down payment of 2.50% must be collected in providing this facility;

f) This circular's facility will not apply to loans/leases/investments created through fraud;

g) If the principal and interest are not recovered within the stipulated time, the financial institution will take necessary legal steps and recover the loans/leases/investments;

h) Customers may submit applications after depositing the required amount for the down payment within 90 days from the date of issuance of this circular; and

i) Financial institutions will decide on customer applications within 60 days from the date of receipt of the borrower's application, according to their operational approval process.

These instructions are issued under the powers granted by Section 18(6) of the Financial Institutions Act, 1993.

Yours faithfully,

(Md. Amir Uddin)
Director (DFIM)
Phone: 9530178.

Date: 05 Bhadra 1430
20 August 2023