Regulatory Alerts2022-06-07
Added
DFIM Circular Letter No. 08: Loan/Lease/Investment Write-off Policy for Financial Institutions
The Department of Supervision and Financial Institutions Management (DFIM) of Bangladesh Bank mandates that financial institutions take appropriate legal action against loans misused for illegal purposes or created through fraud using fictitious entities. It prohibits the write-off of receivables under Circular No. 02/2019 prior to the completion of such legal measures, while confirming that all other instructions in that circular remain unchanged. These instructions are issued under Section 18(c) of the Financial Institutions Act, 1993, and take immediate effect.
Department of Supervision and Financial Institutions Management Bangladesh Bank Head Office Dhaka. Ref No.: D.S.F.I.M. DFIM Circular Letter No.-08 Date: To All Chief Executive/Managing Directors All Financial Institutions operating in Bangladesh.
Dear Sir, Loan/Lease/Investment Write-off Policy (LLIW).
Reference is drawn to your attention to DFIM Circular No.-02, dated 01 April 2019, on the subject above.
In this regard, the following decision has now been taken:
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Financial institutions shall take appropriate legal action in cases where distributed loans are not used for their intended purpose, are used for illegal purposes, or are created in the name of a fictitious or non-existent institution through fraud or deception;
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The receivables of the concerned loan/lease/investment shall not be written off under DFIM Circular No. 02/2019 before the completion of the legal action taken;
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All other instructions of DFIM Circular No.-02/2019 shall remain unchanged.
These instructions are issued under the powers conferred by Section 18(c) of the Financial Institutions Act, 1993, and shall come into force immediately.
Yours faithfully, 24 Jyestha 1429 Date: ------------------- 7 June 2022
(Md. Zulkar Nain) Director (DFIM) Phone: 9530178