Bangladesh Bank (BB) has introduced a special exit policy allowing finance companies to recover and adjust non-performing loans (NPLs) through one-time settlements. This initiative aims to reduce classified loans and improve liquidity in the financial sector.
The policy targets borrowers whose businesses, industries, or projects have suffered due to circumstances beyond their control, enabling them to settle outstanding liabilities under a special arrangement.
Under the policy, borrowers must repay their entire outstanding principal in a single installment. While finance companies cannot waive the principal amount, they may waive accrued interest after verifying the borrower's genuine need.
Any interest waiver must be examined by the company's internal audit department and approved based on the opinion of the Head of Internal Control and Compliance (HICC). In unavoidable cases, conditions relating to the recovery of the cost of funds may also be relaxed.
The facility applies to loans classified as "Bad/Loss" as of June 30, 2026, including loans that were rescheduled between August 6, 2024, and June 30, 2026. However, loans involving fund diversion, forgery, fraud, or other irregularities are not eligible for this special exit facility.
Bangladesh Bank has instructed finance companies to give priority to settling short-term agricultural loans and loans extended to the Cottage, Micro, Small, and Medium Enterprise (CMSME) sector. The central bank has asked finance companies to inform eligible borrowers about the facility through letters and other appropriate communication channels.
Issued under Section 41 of the Finance Companies Act, 2023, the special policy comes into immediate effect and will remain valid until December 31, 2026. This policy is expected to provide much-needed relief to finance companies and borrowers, contributing to a healthier financial ecosystem in Bangladesh.
