DHAKA, Dec 4, 2024 (BSS) – Bangladesh Bank (BB) has relaxed the rules of loan classification and provisioning for the Cottage, Micro, Small and Medium Enterprises (CMSME) sector to create more employment opportunities through increasing investment.

The central bank today issued a circular to this end.

As per the circular, financial institutions will have to keep 5 percent provision on the outstanding amount of loan or lease kept in the ‘Special Mention Account’ after netting off the amount of interest suspense.

But, 0.25 percent provision will have to be kept for regular loans in the CMSME sector.

For CMSME, financial intuitions will have to keep 5 percent provision for sub-substandard loans, 20 percent provision for doubtful loans and 100 percent provision for bad and loss-classified loans or lease.

For all other loans or lease, financial intuitions will have to keep 20 percent provision for sub-substandard loans, 50 percent provision for doubtful loans and 100 percent provision for bad and loss-classified loans or lease.

All other instructions of the master circular issued on July 26, 2021 will remain unchanged.