Bangladesh Bank has issued new instructions removing the previously required time limit for writing off non-performing loans. From now on, if any loan is classified as Bad or Loss and is deemed unlikely to be recovered, it may be written off without waiting for any specific duration.
A circular regarding this was issued on Wednesday (19 November) by the Banking Regulation and Policy Department (BRPD).
According to the new directive, all bad and loss-category loans with little chance of future recovery may be written off. However, older classified loans will be given priority. Additionally, the borrower must be notified at least 10 working days before the write-off.
Through this circular, the previous condition described in Article 2(1) of BRPD Circular No. 04/2024—meaning only those loans that remained continuously in the Bad or Loss category for two years could be written off—has been canceled. The new instructions will take immediate effect.
