Bangladesh Bank has reduced provisioning requirements for short-term agricultural and cottage, micro, small-and-medium enterprises (CMSMEs) lending in a move aimed at stimulating credit flow to key sectors of the economy.
Under a directive issued on Wednesday, the central bank set a uniform provisioning rate of 0.50 per cent against all unclassified loans, covering both standard loans and Special Mention Accounts, within the short-term agricultural and CMSME sectors.
The revised provisioning rate will remain effective until 31 December 2026.
The move marks a significant easing of regulatory requirements for commercial banks, which under BRPD Circular No 15 of 2024 were required to maintain provisions of 1 per cent for standard loans and 5 per cent for Special Mention Accounts.
By lowering the provisioning buffer for selected sectors, Bangladesh Bank aims to encourage banks to expand lending to agricultural producers and CMSME entrepreneurs.
The directive takes immediate effect and was issued under Section 49 of the Bank Company Act 1991.
The new circular repeals earlier instructions issued under BRPD Circular Letter No 22 of 2025, while all other general guidelines on loan classification and provisioning outlined in the 2024 circular remain unchanged.
