BB eases provisions for loan classification

Bangladesh Bank (BB) on Tuesday relaxed loan-classification provisions requiring the borrowers to pay at least half of their payable installments by June 30 to avoid being classified.
The Banking Regulation and Policy Department (BRPD) of the central bank issued a circular regarding this on the day.
It said businesses that were branded as 'unclassified' from April to June this year would not be classified as defaulters, if they repay only 50 per cent of their installment.
Simultaneously, short-term agriculture credit and micro-loans will also be eligible for these benefits, according to the circular.
The central bank said the instructions were given to keep all businesses running, including the manufacturing and services sectors, in order to maintain the momentum of economic activity.
It said the prices of various materials, including raw materials and transportation costs, increased in the international market due to the Russia-Ukraine war, which made it difficult for borrowers to repay their loans in full.
It also said the borrowers would have to pay remaining part of the installment in the next three months either in monthly equal installment or one-time payment.

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