Bangladesh Bank has fixed payment at least 15 percent loan installments by 2021, for not to be classified CMSME loans.
Considering the worsening situation of cottage, micro, small and medium enterprise (CMSME) and delayed recovery, the central bank relaxed policy for cottage, micro, small and medium enterprise (CMSME).
The Banking Regulations and Policy Department of BB earlier fixed that banks cannot classify loans if a borrower paid at least 25 percent of loans’ installments by 2021. But the central bank has to change its decision as a large number of CMSMEs cannot meet the condition, sources said.
Read: No more extensions to moratorium on loan classification beyond Dec 31: BB
The BB issued a circular on Wednesday keeping provision of 1.5 percent instead of 2.0 percent so that banks are encouraged to disburse loans to the CMSME sector. Banks can transfer the interest or profit of these loans to the income sector, the circular added.
The relaxation will be applicable only for the period of January1, 2021 to December 31, 2021.