SMESPD Circular Letter No. 14: Special loan/investment facility provided to CMSME sector affected by Novel Corona Virus (COVID-19) pandemic

SMESPD Circular Letter No. 14: Special loan/investment facility provided to CMSME sector affected by Novel Corona Virus (COVID-19) pandemic

Date: 19 November, 2020
SMESPD Circular Letter No. 14
Date: ---------------------
04 Agrahayan, 1427

To:
Managing Directors / Chief Executives
All Scheduled Banks and Financial Institutions operating in Bangladesh.

Dear Sir,

Regarding the special loan/investment facility provided to the CMSME sector due to the outbreak of Novel Corona Virus (COVID-19).

Reference is drawn to SMESPD Circular No. 01/2020 issued on 13 April, 2020 on the subject matter mentioned above.

2. It has been observed that many banks/financial institutions are facing difficulties in complying with the requirement mentioned in the subject circular to adjust excess positions within 05 (five) working days. Specifically, due to deposited checks not being credited to the loan/investment account heads in time for various reasons, the mentioned percentage of excess position adjustment is not being achieved. Furthermore, it is not feasible for CMSME customers to pay off bank dues at the beginning of the month. Additionally, banks/financial institutions are facing problems in submitting information to the SMESPD of Bangladesh Bank for no-objection within the stipulated time, after obtaining necessary documents and approval from the competent authority following adjustment by customers.

3. Considering the above matters, it has now been decided that paragraphs 8(x) and 9(x) of the said circular shall be replaced/amended as follows:

In paragraph 8(x): 'The position of loan/investment (including interest/profit charged against the loan/investment) shall not in any case exceed the approved loan/investment limit. And if the loan/investment limit exceeds due to the imposition of interest/profit for any reason, the borrower shall repay the excess amount within 10 (ten) working days after the end of each quarter.'

In paragraph 9(x): 'The concerned bank or financial institution shall submit information in accordance with Annexure-3 regarding loans/investments provided in the past three months to the "SMESPD" of Bangladesh Bank within 12 (twelve) working days of the month following the quarter, along with the no-objection certificate of the said department, and apply to the "Accounts and Budgeting Department" of Bangladesh Bank for subsidy regarding interest/profit.'

4. Except for the aforementioned, other paragraphs of the said circular shall remain unchanged.

5. This instruction shall come into force immediately.

6. This instruction is issued under the powers conferred by Section 45 of the Bank Company Act, 1991.

Yours faithfully,
(Husne Ara Shikha)
General Manager
Phone: 9530502