The Bangladesh Bank has introduced new guidelines for the repayment of industrial term and home construction loans to align with the new market-based interest rate system, replacing the previous SMART-based formula. The shift to market-based rates has led to higher interest rates, surpassing the fixed rates in effect before July 1, 2023, which has increased borrowers’ installment amounts.
To mitigate the impact on borrowers and support industrialization and exports, the central bank suggests rescheduling the number of installments without raising the repayment amount. This approach aims to enhance the repayment capacity of borrowers with limited incomes.
Key instructions include extending the repayment period for loans disbursed before July 1, 2023, to prevent loans from becoming part of debt restructuring. Banks can independently decide on repayment terms for employee salary-based loans within the customer’s employment period. Unclassified loans as of March 31, 2023, will be eligible for restructuring, except for converted term loans and those under special incentive packages or funds.
Source for more details:
