Provisioning requirement reduced for agri, CMSME loans

Bangladesh Bank (BB) has reduced the loan provisioning requirement for short-term agricultural and cottage, micro, and small enterprise (CMSME) loans in a move aimed at encouraging banks to expand credit to priority sectors.

The central bank issued a circular in this regard today, saying that scheduled banks will be allowed to maintain a lower provision of 0.50 percent against all unclassified short-term agricultural loans and CMSME loans until December 31, 2026.

Read more

Banks must allocate 27% of loans to SMEs by 2029: BB

Previously, banks were required to keep provisions of 1 percent for standard loans and 5 percent for Special Mention Accounts (SMA), as per Bangladesh Bank's loan classification and provisioning policy issued in November 2024.

The central bank said the relaxation was introduced to support banks' participation in disbursing short-term agricultural credit and financing cottage, micro, and small enterprises, which are considered vital for employment generation and inclusive growth.

The directive repeals instructions issued under a separate circular in October 2025, while all other provisions of the November 2024 policy will remain unchanged.

Read more

Banks’ lending to SMEs falls to four-year low