Bank always try to keep al unclassified loan at regular condition and also to decrease the amount of classified loan through cash recovery and declassify of classified loan under rescheduling process.
If business
organization, project
or
production in industry of debtor become
hampered due to natural calamities, political instability and any other reason
And the loan become classified , this loan can be reschedule to regularized or full recovery.
01. GUIDELINES FOR CONSIDERING APPLICATION FOR LOAN RESCHEDULING:
Banks shall comply with the following instructions
while considering application
for loan rescheduling of
non-performing loan (loans classified as
Sub-standard,
Doubtful and Bad/Loss):
a) The bank must have a policy approved by its Board of
Directors in place that
defines the circumstances
and conditions under
which a loan may be rescheduled, consistent with this
circular.
The policy must include controls
to
avoid the routine rescheduling and repeat
rescheduling of loans in those cases
where borrowers are experiencing financial difficulty or
there is doubt that the full amount of the loan will be recovered.
b) When a borrower
asks
for rescheduling of loan, the bank shall meticulously examine the causes
as to why the loan has become non-performing.
If it is detected from such review that the borrower has diverted funds elsewhere
or the borrower is
a habitual loan defaulter, the bank shall not consider the
application for
loan rescheduling
c) If a borrower while applying for rescheduling, pays
the
required down
payment in cash at a time, the bank must address the application within 03
(three)
months upon receipt
d) Banks must consider overall repayment capability and liability position of the
borrower with other banks and financial institutions.
e) Banks shall review the borrower's cash flow statement, audited balance sheet,
income statement and other
financial statements in order to ensure whether the borrower would be able to repay or
not.
f) If required, bank officers shall conduct spot inspections of the borrower's
company/business place and preserve such reports in their branches for
Bangladesh Bank‘s inspection.
g) If
a bank is satisfied after due diligence as
mentioned above that the borrower will be able to repay, the loan may be rescheduled.
h) Rescheduling of any loan must be justified in written statement by the bank's Credit Committee describing the reasons and factors why the rescheduling is beneficial to the long- run profitability and capital adequacy of the bank and will ultimately be repaid in full
02. TIME LIMIT FOR RESCHEDULING:
The rescheduling shall be for a minimum reasonable period of time. Time limit for rescheduling of different categories of loans will be as follows:
a) Time limit for rescheduling Continuous Loan: The loan account in which transactions may be made within certain limit and have an expiry date for full adjustment will be treated as Continuous Loan:
|
Frequency |
Repayment Time(month ) limit for
loan Classified as
Sub-standard from the date of rescheduling |
Repayment Time(month ) limit for
loan Classified as
Doubtful from the date of rescheduling |
Repayment Time(month ) limit for
loan Classified as Bad/Loss from the date of rescheduling |
|
First Rescheduling |
Maximum 18M |
Maximum 12 M |
Maximum 12 M |
|
Second Rescheduling |
Maximum 12M |
Maximum 09 M |
Maximum 09 M |
|
Third Rescheduling |
Maximum 06 M |
Maximum 06 M |
Maximum 06 M |
b) Time limit for rescheduling Demand Loan: The loan which becomes repayable on demand by the bank and If
any contingent or
any other
liabilities
are turned to forced loan those too will be treated as Demand Loans.
|
Frequency |
Repayment Time(month )
limit
for loan Classified as
Sub-standard from
the
date of rescheduling |
Repayment Time(month )
limit
for loan Classified as
Doubtful from the date of rescheduling |
Repayment Time(month )
limit
for loan Classified as Bad/Loss from the date of rescheduling |
|
First Rescheduling |
Maximum 18M |
Maximum 9 M |
Maximum 9 M |
|
Second |
Maximum 9M |
Maximum 06 M |
Maximum 06 M |
|
Rescheduling |
|
|
|
|
Third Rescheduling |
Maximum 06 M |
Maximum 06 M |
Maximum 06 M |
c) Time limit for rescheduling Fixed Term Loan: The loan which is repayable within a specified time period under a prescribed repayment schedule is treated as Term Loan.
|
Frequency |
Repayment Time(month ) limit for
loan Classified as
Sub-standard from
the
date of rescheduling |
Repayment Time(month )
limit
for loan Classified as
Doubtful from the date of rescheduling |
Repayment Time(month )
limit
for loan Classified as Bad/Loss from the date of rescheduling |
|
First Rescheduling |
Maximum 24M |
Maximum 18 M |
Maximum 18 M |
|
Second Rescheduling |
Maximum 18M |
Maximum 12 M |
Maximum 12 M |
|
Third Rescheduling |
Maximum 12 M |
Maximum 09M |
Maximum 09M |
|
Frequency |
Repayment Time(month )
limit for
from the date of rescheduling |
|
First Rescheduling |
Not exceed 2 yrs |
|
Second Rescheduling |
Maximum 1yrs |
|
Third Rescheduling |
Maximum 06 M |
a) Application for
first time rescheduling will be taken into consideration upon receiving cash payment of at least 15% of the overdue installments or 10% of
the total outstanding amount of loan, whichever
is less;
b) Application for
second time rescheduling will be considered upon receiving
c) Application for rescheduling third time will be considered upon receiving cash payment of
minimum 50% of
the overdue installments
or
30% of the total
outstanding amount of
loan, whichever is
less.
d) The rate of
down payments for
Short-term Agricultural and Micro-Credit will
be same as above.
04. DOWN PAYMENT OF DEMAND AND CONTINUOUS LOAN:
a) If a Demand or Continuous Loan is converted into a Term loan, first rescheduling may take place against down payment on the basis of loan amount in the following manner.
|
Amount of Overdue Loan |
Rate of Down payment |
|
Up to Tk.1.00 (one)
crore |
15% |
|
Above Tk.1.00(one)
crore and up to Tk.5.00(five) crore |
10% (but not less
than Tk.15.00 lac) |
|
Above Tk. 5.00(five) crore |
5% (but not less
than Tk.50.00 lac) |
b) If any Continuous or Demand Loan is
rescheduled for the second time
receiving cash payment of
minimum 30% of
the overdue installments
or 20% of
the
total outstanding amount of
loan