Bangladesh Bank Announces New Loan Restructuring Policy for Affected Businesses: Repay Over 10 Years with 2% Deposit

Staff Reporter | PNN:

Bangladesh Bank has announced a new loan restructuring facility for businesses that suffered losses during the ousted Awami League government or due to the rising value of the US dollar. Under the new notification, affected businesses can regularize defaulted loans by depositing just 2% of the principal. The maximum tenure of these loans will be 10 years, with an initial two-year grace period.

Applications must be submitted to the respective banks by December 31 of this year. Once received, the banks are required to process the applications within six months. The final decision on loan restructuring will be made by the boards of the respective banks.

Bangladesh Bank stated that the main objective of this initiative is to rehabilitate businesses affected by political and global factors, restore dynamism in the banking sector, and ensure a continued flow of employment in the country’s economy.

Anis A Khan, former Chairman of the Association of Bankers Bangladesh, said, “Many of the country’s successful businesses are struggling due to defaulted loans. This facility will help them restart their operations before the elections, contributing significantly to GDP growth and employment.”

The notification also mentions that for loans of BDT 30 crore or more, if the bank cannot provide policy support, the restructuring committee must apply for approval from the bank’s board. However, loans taken through fraud or irregularities are excluded from this facility.

With this new policy, businesses affected during the ousted government, politically connected individuals, and key economic institutions will have the opportunity to restart or accelerate their operations.