The Bangladesh Bank has introduced a special loan restructuring policy that allows distressed businesses up to two years of grace and a maximum of 10 years to repay their debts, in a move aimed at reviving enterprises hit by losses and financial strain.
The new framework, issued Tuesday by the central bank’s Banking Regulation and Policy Department, is designed to provide breathing space to companies struggling with repayments amid economic slowdown, currency volatility, and energy disruptions.
Officials said the policy seeks to help firms restore operations and profitability, while also easing pressure on the banking system, where non-performing loans have been steadily rising.
Borrowers with classified loans outstanding as of June 30, 2025, will be eligible to reschedule under the scheme. They must pay a minimum of two percent of their outstanding balance in cash before approval.
For borrowers who have restructured three times or more, the down payment will rise to three percent. Banks may offer new terms with interest rates up to one percentage point below the lowest rate available in the borrower’s sector.
Repayments will be made on a monthly or quarterly basis. Any missed installments will cause the loan to be reclassified, and suspended interest cannot be recorded as income until collected.
The policy also sets clear timelines. Borrowers must apply by December 31, 2025, and banks must decide on applications within six months. Approvals will be granted by bank boards, while loans exceeding Tk 30 billion will require review by a policy-support committee.
Fraudulent loans and those declared as willful defaults will not be eligible for the facility. Banks have been directed to verify borrowers’ repayment capacity and, if necessary, engage third-party auditors to assess financial positions before granting restructuring benefits.
Central bank officials said the measures are targeted at viable enterprises whose repayment difficulties stemmed from external shocks rather than mismanagement.
“Many firms with otherwise sound fundamentals have been unable to keep up with repayments due to conditions outside their control,” one senior official said. “This policy is meant to give them the runway to recover.”
The framework took effect on September 16. Analysts say the initiative could provide immediate relief to troubled borrowers but also risks prolonging structural issues in the banking sector if not implemented with strict oversight.
