The Bangladesh Bank on Sunday extended the loan repayment tenure for crisis-stricken Sri Lanka by one year as the island nation is in default on its entire $ 51 billion foreign loans.

The decision on the extension was made at a board meeting of the central bank held on Sunday, with its governor Fazle Kabir in the chair, sources said.

In August 2021, Bangladesh extended the credit facility amounting to $ 200 million under a currency swap deal with Sri Lanka.

The loans were released in three phases on August 19, August 30 and September 21 in 2021.

Under the initial conditions, Sri Lanka was allowed to use the loans for up to one year with a renewal clause in three-month intervals.

So Sri Lanka was supposed to clear the loans in three phases by September, 2022.