BRPD-2 Circular Letter No. 02: Selection of Qualified Mediators for Effective Mediation in Resolving Disputes through Pre-Suit Mediation

Bangladesh Bank Central Office Motijheel, Dhaka-1000 Bangladesh Ref No.: BRPD-2 Banking Regulation and Policy Department-2 BRPD-2 Circular Letter No. 02 11 March 2026 Date: --------------------- 26 Falgun 1432

Managing Director / Chief Executive Officer All Scheduled Banks operating in Bangladesh

Dear Sir,

Regarding the selection of qualified mediators for effective mediation in resolving disputes through "Pre-Suit Mediation" (Choto-Jhor Gobarodhoh).

We draw your attention to BRPD Circular No. 11 issued on 12 May 2024 on the aforementioned subject.

2. Through the aforementioned circular, greater emphasis was placed on Alternative Dispute Resolution [Alternative Dispute Resolution (ADR)] for out-of-court dispute resolution with the aim of rapid recovery of banks' non-performing loans. Furthermore, a target was set for each bank to achieve a minimum of 1% cash recovery of its non-perposing loan position through ADR by 30 June 2026. The aforementioned circular also mentions mediation after the filing of a lawsuit against the defaulting customer, as well as pre-suit mediation. In addition, to avoid delay in the recovery of non-performing loans, instructions were given to select skilled and experienced mediators, or retired judges, retired officers of banks or financial institutions, lawyers, or any other suitable person with a successful track record as mediators, who provide mediation services with the consent of both the banker and the customer.

3. The government is prioritizing "Pre-Suit Mediation" (Choto-Jhor Gobarodhoh) to ensure access to justice at low cost and in a short time through the Alternative Dispute Resolution system, to reduce the burden of cases on the courts, and to eliminate delays in judicial proceedings. For example, in the Commercial Courts Ordinance, 2026 and the Legal Aid (Amendment) Ordinance, 2025, dispute resolution through "Pre-Suit Mediation" has been made mandatory. In this context, giving greater importance to 'Pre-Suit Mediation' in the recovery of banks' non-performing loans can play a significant, effective, and fruitful role in the recovery of banks' non-performing loans.

4. In the case of mediation after the filing of a lawsuit (Gobarodhoh), the parties to the lawsuit can resolve their disputes in accordance with the provisions of existing laws; for example, in the recovery of non-performing loans, the 'Ordinance on Debt Recovery Courts, 2003' provides for mediation at any stage after the filing of the lawsuit. Therefore, in the case of lawsuits filed for the recovery of non-performing loans, the provisions of the aforementioned law and other relevant laws will apply to mediation after the filing of the lawsuit.

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-02- 5. In the context mentioned above, the role of skilled and experienced mediators is immense in using mediation as an effective, cost-saving, and fruitful method under the Alternative Dispute Resolution system for the continuous recovery of non-performing loans. Several institutions are working within the framework of the country's existing laws and regulations to provide Alternative Dispute Resolution services through mediation. The institutions formed to operate these service programs register mediators on their panels based on appropriate qualifications, experience, and proficiency in conducting mediation. Therefore, if mediators are selected from the panels of these service-providing institutions, banks will be able to appoint mediators who are fast, reliable, experienced, and acceptable to both parties. In this regard, instructions are being given to ensure the following matters regarding the appointment of qualified mediators by banks in resolving disputes through 'Pre-Suit Mediation' (Choto-Jhor Gobarodhoh):

(a) The mediator must be registered on the panel of institutions formed for the purpose of providing mediation services under existing laws and regulations;

(b) The person appointed as a mediator for the parties must not have been a representative, director, or held any profitable position for those parties; or they must not be involved in any actual or apparent interest with said parties in the past, present, or future;

(c) He must have at least 07 (seven) years of experience in law, commerce, banking, corporate management, or the relevant professional field. Among these, he must have at least 03 (three) years of experience in banking/commercial contracts/commercial dispute resolution;

(d) He must have knowledge of policies, procedures, and prevailing practices related to banking and financial institutions and a clear understanding of circulars and instructions issued by Bangladesh Bank;

(e) He must be trained in mediation from a recognized institution in the country or abroad;

(f) He must have a precedent of past success in maintaining neutrality and confidentiality, communication skills, and conflict resolution;

(g) He must not have been sentenced by any criminal court, nor has he ever been sentenced for violating any rules, regulations, or laws of any regulatory authority;

(h) He must not have been dismissed from service/profession due to embezzlement, corruption, forgery/fraud, or moral turpitude;

(i) He must not be a defaulter of any bank or financial institution; and

(j) He must never have been declared bankrupt by a court.

6. In case of compliance with the aforementioned matters regarding the appointment of mediators, the bank will collect necessary documentary evidence and, where applicable, certificates/affidavits/deeds, etc.

7. Instructions are given to inform the bank's customers about the subject of this circular letter.

8. In addition, the other instructions of BRPD Circular No. 11/2024 will remain unchanged.

9. This circular letter is issued under the authority vested in Section 45 of the Companies Act, 1991, and it will come into force immediately.

Yours faithfully,

(Md. Alauddin) Director (BRPD-2) Phone: 9530095