DHAKA, Feb 08, 2026 (BSS) – Bangladesh Bank (BB) today issued revised guidelines for rescheduling housing loans, significantly easing previous time-bound restrictions to better support borrower repayment capacity. 

According to a BB circular, the central bank aims to facilitate regular installment payments by offering more flexible repayment structures.

Previously, housing loans under Taka 100 crore were restricted to a maximum rescheduling period of six years. This rigid cap often resulted in rescheduled terms being shorter than the borrower's original remaining tenure, creating a spike in monthly financial obligations.

By removing the fixed six-year limit and linking the extension to the remaining term, the central bank aims to lower the Equated Monthly Installment (EMI). This adjustment ensures that monthly payments remain within the borrower's actual cash-flow capacity, thereby reducing the risk of default.

Under the new instructions, banks are authorized to calculate the maximum repayment period based on the specific rescheduling sequence. Furthermore, a grace period of up to six months may be granted, provided it is supported by the borrower’s projected cash flow.

The repayment period calculations are structured as follows:

For a first rescheduling, the maximum period is the existing remaining term plus an additional 30% of that term. A second rescheduling allows for the existing remaining term plus 20% of that term. For third and fourth rescheduling, the maximum repayment period is limited to only the existing remaining term.

To maintain credit discipline, the central bank has mandated several strict conditions that banks must observe during the rescheduling process:

The total extended period cannot exceed the timeframe originally granted at the time of the loan sanction. For example, a loan initially sanctioned for 20 years cannot have its final maturity date stretched beyond a total of 20 years from the original commencement, regardless of extensions granted during rescheduling.

Banks must ensure that the entire loan is recovered before the borrower reaches 65 years of age. The final installment date must not, under any circumstances, exceed the borrower’s 65th birthday.

Banks are required to verify that all original loan documentation is intact and that all other applicable regulatory conditions are met before approval.

The circular also addresses the takeover of rescheduled housing loans by other banks or financial institutions. In such instances, the rescheduling sequence (1st, 2nd, etc.) is cumulative and carries over from the previous institution. Banks must obtain a mandatory formal declaration from the borrower regarding their prior rescheduling history to prevent "term-resetting" and ensure transparency.

For all other aspects not specifically detailed in this new circular—including the mandatory down payment requirements—the provisions of the original BRPD Circular No. 16/2022 remain in full effect.

Bangladesh Bank issued these instructions under the authority vested in it by Section 49(1)(ch) of the Bank Company Act, 1991. The directive applies to all scheduled banks operating in the country and comes into force immediately.