In a move to provide breathing room for struggling businesses, Bangladesh Bank has relaxed its regulations regarding the down payment required for loan rescheduling. According to a circular issued on Sunday, February 22, borrowers will no longer be required to pay the full down payment upfront.
Under the new directive, businesses looking to restructure or reschedule their loans can now pay the mandatory down payment in two installments. This policy shift aims to alleviate the immediate liquidity pressure on crisis-hit institutions.
Key Changes to the Rescheduling Process
Previously, the entire down payment had to be deposited simultaneously with the rescheduling application. The updated guidelines introduce the following flexibility:
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Initial Payment: Applicants must pay 50% of the required down payment at the time of application.
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Deferred Payment: The remaining 50% can be paid within six months after the rescheduling becomes effective.
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Implementation Extension: For institutions that have already received approval from the Policy Support Committee but failed to implement changes due to logical constraints, an additional three-month extension has been granted.
Strategic Relief for Businesses
A central bank official noted that many genuine businesses were struggling to manage the lump-sum amount (typically 2% of the total loan) required for rescheduling. By splitting this requirement, the central bank hope to facilitate a more realistic path toward financial recovery for damaged portfolios.
Regarding interest waivers, the central bank clarified that individual bank boards retain the authority to make decisions based on the specific bank-customer relationship, following existing policy frameworks.
| Feature | Old Rule | New Rule |
| Down Payment Timing | 100% at time of application | 50% at application; 50% within 6 months |
| Implementation Deadline | Fixed | 3-month extension available |
| Interest Waiver | Board Discretion | Board Discretion (Remains unchanged) |
