DHAKA, June 02 (V7N): Bangladesh Bank (BB) has relaxed the institutional eligibility criteria for commercial lenders participating in the Japan International Cooperation Agency (JICA)-assisted Urban Building Safety Project (UBSP). This policy shift aims to accelerate the disbursement of low-cost development credits dedicated to structural, electrical, and fire safety remediation across the country’s readymade garment (RMG) factories.

The central bank’s SME & Special Programmes Department (SMESPD) issued an official circular updating the Operating Guidelines under Component-1 of the project (specifically coded as BD-P84). The apex bank replaced Clause 4.1(6) of the guidelines, introducing a revised threshold that allows Participating Financial Institutions (PFIs) to qualify for the scheme provided their non-performing loan (NPL) ratio does not exceed 20 percent.

[Old PFI Eligibility Standard] ───► Strict Non-Performing Loan (NPL) Caps (Smaller Lender Pool)
[Revised Operating Guideline] ───► NPL Ratio Capped at ≤20% (Expanded Lender Pool)
                                    └───► Result: Accelerated credit flows for RMG factory remediation

Central bank officials noted that the regulatory easement was required to bypass slow credit disbursement pipelines that previously bottlenecked structural renovations in export-oriented garment industrial hubs.

Expanding the Lender Pool: By raising the maximum allowable NPL ceiling for participating banks, the central bank is widening the pool of domestic commercial financial institutions permitted to act as intermediators for the JICA concessionary fund.

Directives for Immediate Execution: The central bank has directed the Managing Directors and Chief Executive Officers of all commercial banking networks and non-banking financial institutions (NBFIs) to incorporate this revised asset-quality provision into their credit underwriting procedures immediately.A Legacy of Compliance Support: Jointly managed by Bangladesh Bank's SMESPD and the JICA Project Implementation Unit (PIU), the Urban Building Safety Project serves as a critical financial tool for the country's multi-billion dollar RMG industry. The facility provides subsidized funding mechanisms for complex retrofitting, architectural modeling, and the deployment of advanced fire protection networks. The central bank emphasized that all other prudential guidelines, capital requirements, and accounting provisions outlined in the original UBSP manual will remain unchanged.

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