October 3, 2023, 9:33 am

Staff Correspondent

2022-08-04 20:57:33 BdST

Central bank amends loan rescheduling policy

The central bank has amended loan-rescheduling and restructuring policy, asking banks to classify the rescheduled loans if the borrowers failed to repay their instalments within six months, officials say.

Under the revised policy, all the scheduled banks have been instructed to classify the rescheduled loans as bad/loss category if the borrowers failed six monthly or two consecutive quarterly instalments, according to a clarification, issued by the Bangladesh Bank (BB), on Wednesday.

BB's latest moves came after more than two weeks of announcing the fresh loan rescheduling and restructuring policy.

"We've tightened our policy to ensure credit discipline in the country's banking system," a BB senior official said while explaining the main objective of the amended policy.

He also said banks could not bring the interest amount to their income accounts without actual repayment of the loans although the loans will be unclassified after rescheduling.

Earlier, on July 18, the central bank relaxed its loan rescheduling and restructuring policy, aiming to facilitate the country's overall business activities.

Under the policy, borrowers are allowed to reschedule their classified loans in fourth times, instead of three times earlier, considering recovery of classified loans.

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