Regulatory Alerts2024-07-08
Added · Updated
BRPD Circular No. 13: Exit Policy for Recovery/Settlement of Loans
Bangladesh Bank issues a mandatory minimum standard policy for the exit recovery or settlement of non-performing loans (NPLs) and loans where business/project closure is due to extraneous reasons or poor financial health. Scheduled banks must require a minimum 10% cash down payment, obtain approval from the Board of Directors or Executive Committee, and limit repayment periods to two years (extendable by one year). The policy mandates that existing NPL classifications remain in effect until full settlement, prohibits new lending during the exit process, and requires adherence to specific interest waiver and collateral release guidelines.
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