Banks have been given go-ahead to extend loans up to Tk 10 lakh to non-resident Bangladeshis (NRBs) working abroad in case of emergencies.

Bangladesh Bank issued a circular in this regard today.

The central bank made the decision to support the migrant workers who are facing unexpected financial crisis and failing to send remittances home.

According to the circular, banks can extend these loans based on banker-customer relationships for bona fide purposes.

It also said that the banks must extend the emergency loans to the NRBs who regularly send remittance through the formal channels.

The repayment of these loans must be made from the remittances sent by the borrowers, ensuring that the loans are closely tied to incoming foreign exchange, according to the circular.

Banks are also required to adhere to all applicable credit norms, prudential regulations, and due diligence procedures when approving such loans, it said.

Read more

Taskforce for banking sector to start work in 10 days

The move is expected to encourage NRBs to continue using formal remittance channels, which is crucial for maintaining steady foreign currency inflows, BB officials said.

They said if the NRBs require loans exceeding Tk 10 lakh, banks will need to obtain prior approval from the central bank before extending additional credit.

In recent years, the country has seen fluctuations in remittance inflows, and measures like this aim to secure a more stable stream by encouraging NRBs to remain within formal banking systems.

Remittance inflow to Bangladesh soared by over 80 per cent year-on-year in September this year, as expatriates sent more money through formal channels following major political shift in the country.

According to Bangladesh Bank data, the remittance inflow rose to $2.40 billion in September compared with that of $1.33 billion in the same month in 2023.

The inflow was $2.22 billion in August this year.

The remittance inflow slowed in July due to countrywide protest over quota reforms, which eventually cause the fall of the Awami League government.