B Mirror Report: Bangladesh Bank has introduced a new policy facility aimed at helping distressed businesses resume operations by allowing them to regularize defaulted loans under relaxed conditions.

Under the new directive, loans classified as defaulted until March 31, 2026, will be eligible for rescheduling subject to certain conditions. Borrowers must apply for the facility by June 30.

According to the policy, borrowers will be required to make a 2 percent down payment to regularize their loans. Eligible loans can then be rescheduled for a maximum period of 10 years. Businesses will also be allowed a grace period of up to two years before beginning repayments.

However, companies that had previously regularized loans under earlier policy support measures will not qualify for the new facility.

The central bank has instructed commercial banks to make decisions on applications within three months of receiving them. Final approval for loan rescheduling will be given by the respective bank’s board of directors, eliminating the need for separate clearance from Bangladesh Bank.

The policy also includes a one-time settlement option, allowing borrowers to repay their entire outstanding loans within one year.

Bangladesh Bank further stated that borrowers will not be eligible for new credit facilities until their rescheduled loans are fully repaid. Banks have also been instructed to maintain required provisioning against such loans and avoid recognizing unrealized income as actual earnings.

Analysts say the move may provide temporary relief to struggling businesses, though it also increases the importance of strong risk management practices in the banking sector.