BB slashes provisioning rates to boost agri, CMSME lending

Business Desk :

In a strategic move to stimulate credit flow to vital sectors of the economy, Bangladesh Bank (BB) has announced a significant reduction in provisioning requirements for short term agricultural and small-scale enterprise credits.

According to a directive issued on Sunday, the central bank has decided to set a uniform provisioning rate of 0.50 percent against all unclassified loans, including both standard and Special Mention Accounts (SMA), within the short term agricultural and Cottage, Micro, Small, and Medium Enterprises (CMSME) enterprise sectors.

This revised rate is scheduled to remain in effect until December 31, 2026.
This policy adjustment represents a substantial easing of financial requirements for commercial banks.

Under general regulations established in BRPD Circular No. 15 of 2024, banks are typically required to maintain provisions at a rate of 1 percent for Standard loans and 5 percent for Special Mention Accounts.

By lowering these buffers for specific sectors, the central bank aims to encourage higher participation from banks in disbursing credits to agricultural and CMSME entrepreneurs.

The directive, which comes into force immediately, was issued by Bangladesh Bank under the authority granted by Section 49(1)(Cha) of the Bank Company Act, 1991.

While this new circular repeals the previous instructions issued under BRPD Circular Letter No. 22 of 2025, all other general instructions regarding loan classification and provisioning from the 2024 circular remain unchanged.