Bangladesh Bank (BB) has introduced new directives concerning the installments of the term (industrial) loans and housing loans following an increase in interest rates. 

A statement from the central bank highlighted the necessity of rescheduling each loan installment amount without extending the number of installments. This move is intended to address the issues borrowers face due to the increased installment amounts.

The circular from BB notes that the global economic situation has adversely impacted the interest rates. Both the smart and market-based interest rates are now higher than the fixed rates that were in place before July 1, 2023. Consequently, the installments payable by industrial enterprises and individual house construction borrowers have risen, causing significant difficulties for customers.

To sustain industrialization and export momentum and support borrowers with limited income in maintaining their repayment capacity, BB has directed banks to consider rescheduling the existing term loan and housing loan installments without increasing the total number of installments.

Specifically, the central bank has issued instructions for collecting installments for term industrial loans and consumer loans disbursed before July 1, 2023. The key directive allows for extending the period required to collect these installments. Importantly, this extension of time for recovery will not be classified as debt restructuring under the BRPD Circular No. 16 / 2022.