BRPD Circular No. 15: Taking thumb impression on loan related charge documents

Bangladesh Bank (Central Bank of Bangladesh) Head Office Motijheel, Dhaka-1000 Bangladesh Ref No: BRPD-15 Banking Regulation and Policy Department BRPD Circular No. 15 02 August 2023 Date: ------------------ 18 Sraban 1430 Managing Director / Chief Executive Officer All Scheduled Banks operating in Bangladesh Dear Sir, Regarding taking thumb impression on loan related charge documents. We draw your attention to the guidelines issued through BRPD Circular No. 04 dated 08 March 2016 regarding the creation of primary and secondary charges (PSC) on properties.

2. Paragraph 3.4 of the aforementioned guidelines contains instructions regarding the execution of loan-related charge documents prior to loan disbursement, as well as the creation of primary and secondary charges. Furthermore, Appendix-1 of the said guidelines lists the charge documents to be obtained based on the borrower, type of loan, and type of loan collateral, where signatures of the borrower and third parties/entities (where applicable) are typically obtained.

3. In accordance with the observations of the Honorable High Court, several writ petitions have recently been filed in court where borrowers and guarantors have stated that they did not sign the relevant documents regarding loan borrowing and guarantee provision. Consequently, the accuracy of the relevant charge documents relies on the signatures of the borrower and guarantor, thereby hindering the legal process of loan recovery.

4. In this context, to resolve the legal complexities arising in loan recovery, the following instructions are issued: It must be ensured that the contents of the charge documents taken/for taking for the purpose of lending are read out to the borrower, guarantors, and relevant third parties/entities. In addition to signing the aforementioned documents (where applicable), thumb impressions from both hands of the borrower and guarantors must be obtained, and these must be verified against the database reserved for the National Identity Card (NID) before acceptance.

5. These instructions are issued under the powers conferred by Section 45 of the Bank Companies Act, 1991, and shall take immediate effect.

Yours faithfully, (Mohammad Shahriar Siddique) Director (BRPD) Phone: 9530252