Banks will be able to accept collateral from the Bangladesh Bank's credit guarantee scheme against loans of Tk25,000 and above given to holders of small accounts worth Tk10, Tk15 and Tk100.
The Bangladesh Bank issued a circular on Wednesday giving the banks detailed instruction regarding this.
Earlier in a circular on 5 September 2021, the central bank mentioned setting up a Tk500 crore fund under the credit guarantee scheme and instructed the concerned banks not to take any collateral for loans less than Tk3 lakh.
The circular instructed the banks to take a personal guarantee of not more than two persons including the borrower instead of collateral.
However, the new circular said the banks will be able to take collateral under the central bank's credit guarantee scheme for loans of Tk25,000 or more which the central bank will pay from the Tk500 crore fund.
The central bank has taken the decision to eliminate the risk of the banks who contributed to the fund.