Photo: Collected

DHAKA, May 13, 2026 (BSS) - Bangladesh Bank (BB) has reduced the maximum penalty interest and profit rate on overdue loans and investments from 1.5 percent to 0.5 percent in a move aimed at supporting investment and boosting productivity amid ongoing global economic uncertainty.

To this end, the central bank issued a directive to all scheduled banks today.

Under the revised policy, if any loan, investment, or installment becomes fully or partially overdue, banks will be allowed to impose a maximum penalty rate of 0.5 percent for the period the amount remains unpaid.

The directive also outlined separate application methods depending on the type of credit facility.

For continuous and demand loans or investments, the penalty will be charged on the total outstanding amount.

In the case of term loans or investments, the penalty will apply only to the overdue installment amount, ensuring the charges remain proportionate to the extent of default.

According to the central bank, the revised ceiling is intended to ease financial pressure on borrowers and investors, encourage business expansion, and help sustain productive economic activities during a challenging global economic environment.

Bangladesh Bank also clarified that all other instructions contained in the earlier BRPD Circular No. 10 will remain unchanged and effective, while actions already taken under the previous guidelines will continue to be considered valid.