BB eases renewal rules for continuous loans until 2027

Bangladesh Bank (BB) has relaxed rules for the renewal of continuous loans, allowing banks to renew such facilities before they turn non-performing, in a move aimed at supporting businesses amid prevailing economic challenges.

The central bank issued a circular today stating that banks must initiate the renewal process at least two months before a loan’s expiry.

If renewal cannot be completed within the stipulated time due to reasons beyond control, banks may still renew the facility before it is classified as a non-performing loan (NPL), it added.

However, lenders must document the reasons for any delay in renewal.

The central bank also instructed that any excess over the approved loan limit must be adjusted before renewal.

Banks are barred from separating the excess portion to create a new loan or transferring it to another account to avoid proper classification.

The policy will remain effective until December 31, 2027. A previous circular issued in June 2025 on the same matter has been revoked.

The directive was issued under Section 45 of the Bank Company Act, 1991, and takes immediate effect.