Expats can get up to Tk10 lakh loan without collaterals from banks now

From now on, expatriates will be able to take up to Tk10 lakh loan from banks based on bank-customer relationships without collaterals.

The decision has been taken to increase the remittance flow of expatriates through banking channels, according to a Bangladesh Bank circular sent to managing directors of all scheduled banks today (2 October).

"To widen the financing facilities, it has been decided that banks can extend loans to NRBs [non-resident Bangladeshis] for bonafide purposes on banker-customer relations," said the circular.

However, it states that NRB borrowers should be regular remitters through official channels to avail the loan facility.

The loan amount shall be up to the requirements or Tk10 lakh, whichever is lower;

"Repayments of the loan need to be settled out of inward remittances sent by borrowers working abroad. Banks shall adhere to applicable credit norms, prudential regulations, customers' due diligence, etc, as usual," states the circular.

Further explaining the facility, a Bangladesh Bank official familiar with the matter said cenbank has taken this step to increase the flow of remittances in the banking channel of expatriates.

"As a result, families of expatriates can easily take loans from banks. This loan will be paid through the remittances sent by expatriates," the official told The Business Standard on condition of anonymity.

The officials also said, "The new government will increase new opportunities for expatriates. Among them, we have given this facility on behalf of the central bank.

"Banks will determine the maximum loan amount that a customer can get from the records of previous remittances sent by expatriates. However, in this case, conditions for collateral have been relaxed."