Bangladesh Bank has introduced a special one-time exit facility to help finance companies recover or adjust their classified bad and loss loans, as part of efforts to shore up asset quality and liquidity in the sector.
The central bank’s Finance Company Regulation and Policy Department (FCRPD) issued the directive on Thursday, addressed to managing directors and chief executive officers of all finance companies operating in the country.
The circular noted that borrowers across businesses, industries and projects have faced difficulties due to various uncontrollable economic factors, with some enterprises shutting down or turning loss-making.
This has disrupted loan recovery for finance companies, prompting the central bank to allow a one-time settlement route for willing borrowers whose chances of regularising loans through the normal process have weakened.
Under the policy, finance companies may offer the special exit—subject to board approval to customers holding loans classified as bad or loss as of June 30, 2026, based on the institution’s relationship with the borrower.
Key conditions set out in the circular include: Borrowers opting for the facility must clear their entire outstanding liability in a single, one-time payment.
According to the circular, the principal amount of the loan cannot be waived, though interest may be waived after verification and selective scrutiny. Where relaxation of fund utilisation conditions or income-sector deviation is required for an interest waiver, the justification must be confirmed through the finance company’s internal audit function, with an opinion obtained from the Head of Internal Control and Compliance (HICC).
Besides loans involving fund diversion, fraud, forgery or other irregularities in disbursement will not qualify for the exit facility. Loss-classified loans that were rescheduled between August 6, 2024 and June 30, 2026 will be eligible under this circular.
Priority in granting the special exit will go to short-term agricultural loans and cottage, micro and small loans under the CMSME sector.
Finance companies have been instructed to notify eligible borrowers in writing about the facility and take other necessary steps to implement it.
The circular will remain in force until December 31, 2026, and has been issued under the powers vested in Bangladesh Bank by Section 41 of the Finance Company Act, 2023, effective immediately.
