BB to enhance supervision on SME loans, investments

Bangladesh Bank (BB) has directed banks and financial institutions to provide information on loan disbursement and investment in the SME sector twice a month instead of once a month.

The central bank’s SME and Special Programs Department issued a circular in this regard on Monday (June 22). The circular was sent to the Managing Directors, CEOs of all scheduled Banks, financial institutions operating in the country.

According to the circular, due to the coronavirus crisis, the response for loans and investments under the special incentive package for the CMSME (Cottage, Micro, Small and Medium Enterprise) sector has not been as expected. Therefore, there is a need for enhanced supervision to accelerate the disbursement of loans in the CMSME sector.

"From now on, banks and financial institutions will have to submit loan disbursement and investment information to the SME and Special Programmes Department within five days after every fortnight. This means the first statement has to be submitted within the 20th day of the current month, and the second one within the 5th day after the month ends," the circular read.

The directive was issued under the powers conferred by Section 45 of the Banking Companies Act, 1991. This instruction will come into effect immediately.

Previously, banks and financial institutions had to provide loans and investment information for the previous month to the central bank on the 10th day of each month.