Sunday, 5th April 2026
Khabor Wala Desk
Published: 23rd February 2026, 4:10 AM
The Bangladesh Bank has recently issued updated guidelines aimed at facilitating the rehabilitation and financial stability of institutions affected by non-performing loans. Under the previous framework, applicants seeking loan restructuring were required to receive the full advance in a single instalment. The new policy eases this requirement, allowing advances to be disbursed in two stages. This change is expected to significantly reduce the initial financial burden on applicants.
According to the updated guidelines, applicants can now receive the advance in two instalments. The first instalment will cover 50% of the total advance, while the remaining 50% must be disbursed within six months. Additionally, for institutions approved by the Policy Support Committee that fail to complete the disbursement within the stipulated period due to legitimate reasons, an extra three months’ grace period is granted.
The key changes are summarised in the table below:
| Aspect | Previous Rule | New Rule | Additional Time |
|---|---|---|---|
| Advance disbursement | 100% at application | 50% upfront; remaining 50% within six months | – |
| Policy Support Committee-approved institutions | Must complete within stipulated time | Stipulated time + 3 months | 3 months |
| Interest waiver decisions | Determined on bank-client relationship | Same rule applies | – |
Officials from Bangladesh Bank noted that requiring the full advance in a single instalment posed a challenge for many struggling institutions. The two-stage disbursement process is expected to ease financial pressure significantly. Furthermore, the additional three-month period for approved institutions provides crucial flexibility for those yet to implement the Policy Support Committee-endorsed benefits.
Decisions regarding interest waivers will continue to be determined by the bank’s board, taking into account the nature of the bank-client relationship. Overall, the new measures are intended to assist institutions in restructuring operations and restoring financial stability.
The revised guidelines are primarily designed to streamline the loan restructuring process for high-risk businesses and enhance overall economic stability. Experts anticipate that the two-stage advance and extended timelines will encourage more institutions to apply for restructuring, thereby accelerating the process.
In summary, these reforms are mutually beneficial for both borrowers and banks. They represent a significant step towards stabilising the national economy, ensuring effective management of restructured loans, and increasing participation in financial rehabilitation efforts.
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