Bangladesh Bank (BB) has extended the deadline for repayment of classified term loan and agriculture credit by six months.

In a circular issued Thursday evening, the central bank authority asked the banks to comply with the extended timeline from the expiry date for repayment of last installment of classified term loans and agriculture credit.

“Because of the latest circular, banks will need less amount of money for adjustment of provisioning against classified loans. As result, banks net profit will increase,” said a BB official, seeking anonymity.

Earlier in June, the central bank had tightened the rules for banks and loan-defaulters to repay classified loans.

Following the BB’s move, the banks needed to keep extra money from profit for provisioning as the amount of classified loans had increased, according to the sources.

Banks were advised to follow other regulatory directives, which mentioned in the master circulars issued on June 14, sources said.

News: The Daily Sun/Bangladesh/23-Nov-12