State-Owned Enterprises Default on Loans

Bangladesh Bank has instructed NBFIs to allow a three-month deferral on loan installments for CMSMEs and the agricultural sector in flood-affected areas. Borrowers can postpone payments due between August and October 2024, with their loan tenure extended by three months and no extra fees or penalties imposed. Verification of borrowers' flood-related hardships is required, but they can opt to continue with their original repayment schedule if desired.

Bangladesh Bank will reduce repo auctions to one day per week starting November 1 to enhance monetary policy implementation. The change follows a previous cut from daily to twice weekly, linked to a $4.7 billion IMF loan condition.

Bangladesh Bank (BB) has relaxed foreign exchange rules, enabling banks to remit payments abroad without prior approval. This includes payments for airline lease rentals, cloud services, and IT infrastructure, as well as remittances for Bangladeshi residents depositing funds for employment or immigration abroad. These changes aim to streamline cross-border transactions and enhance banking flexibility for foreign payments.

A total of 131.89 crore shares of Islami Bank, owned by S Alam Group, have been blocked, representing 81.92% of the bank’s total shares. This action follows a Bangladesh Securities and Exchange Commission (BSEC) order issued on August 24 after a request from Bangladesh Bank to freeze shares owned by S Alam Group Chairman Saiful Alam Masud and 56 associated institutions.

The Bangladesh Bank (BB) is contemplating reducing cash support under its repo facility from twice a week to once a week to enhance banks' liquidity management and invigorate the call money market. This proposal aligns with IMF conditions linked to a $4.70 billion lending package aimed at stabilizing the economy.