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Bailout package for CMSME sector

BB guideline on lending eases

Banks allowed to lend sans ICRRS

FE REPORT | May 13, 2020 00:00:00

Banks are allowed to provide loans without maintaining internal credit risk rating system (ICRRS) to the cottage, micro, small and medium enterprise (CMSME) sector under the Tk 200-billion stimulus package.

The government has recently announced the bailout package for the sector with an intent to help the stakeholders overcome the Covid-19 fallout.

The Bangladesh Bank (BB) has relaxed the guideline, allowing banks to disburse package loans on the basis of bank-customer relationship, according to a notification issued on Tuesday.

All the scheduled banks are eligible to provide loans without following ICRRS only for the stimulus package to help such businesses resume quickly, it said.

They have also been asked to select their borrowers based on their relationship with the customers concerned and make their own risk analysis while offering loans, according to the notification.

"The banks are now eligible to analyse credit risks applying their own responsibilities (discretion)," a BB senior official told the FE while replying to a query.

The central banker further said that the BB has relaxed ICRRS mainly due to the ongoing coronavirus pandemic.

Earlier on April 13, the BB asked the banks through issuing a guideline to set 'marginal' credit risk rating as the qualification for borrowers to get loans under the package.

Similar relaxation was given to the banks on May 10 for providing loans to large industries and services companies under the Tk 300-billion government package.

Meanwhile, the central bank has formed a Tk 100-billion new refinance scheme to help banks implement the Tk 200-billion working capital package for CMSME.

On April 05, Prime Minister Sheikh Hasina unveiled a Tk 200-billion stimulus package for CMSME to cope with the impacts of the novel coronavirus pandemic.

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