Regulatory Alerts2022-04-21
Added
BRPD Circular No. 06: Policy on Interest Waiver
The Bangladesh Bank mandates that scheduled banks may waive interest only under specific exceptional circumstances such as borrower death, natural disasters, or project stagnation, while strictly prohibiting the waiver of principal, interest on fraudulent or willful default loans, and interest waived to artificially inflate income. Banks must obtain Board approval for waivers, with management authorized for loans up to 1 million BDT, and must ensure fund recovery unless specific financial distress conditions are met. The policy requires internal audit verification, review of the last three years' financial statements, assessment of impact on capital adequacy, and prior Bangladesh Bank approval for waivers involving directors or their related parties.