After introducing a special one-time settlement scheme for bank borrowers, Bangladesh Bank has now extended the facility to customers of finance companies (NBFIs) to help recover non-performing loans. Under the scheme, loans classified as bad or loss may be settled through a one-time payment under specified conditions.
Finance companies will also be allowed to waive interest while keeping the principal amount intact, where necessary. The central bank issued a circular in this regard on Thursday. It had earlier introduced a similar special exit facility for customers of scheduled banks on June 29.
According to the circular, loans classified as bad or loss as of 30 June 2026 may be settled under the special exit scheme, subject to approval by the finance company’s board of directors and based on the relationship between the company and the borrower.
Bangladesh Bank said many borrowers have seen their businesses, industries or projects shut down or become loss-making due to factors beyond their control, reducing the likelihood of recovering such loans through the regular process.
It said allowing willing borrowers to make a one-time settlement would help reduce non-performing loans while improving the liquidity position of finance companies.
Under the scheme, borrowers must repay their entire outstanding liability in a single payment. However, the principal amount cannot be waived under any circumstances. Finance companies may waive interest after proper assessment, if necessary. In such cases, they must complete an internal audit and obtain the opinion of the Head of Internal Control and Compliance.
The circular, however, excludes loans involving fund diversion, forgery, fraud or any other irregularities from the special exit facility.
Loans classified as bad or loss that were rescheduled between 6 August 2024 and June 30, 2026 will also be eligible for settlement under the scheme.
The circular also instructs finance companies to give priority to short-term agricultural loans and cottage, micro and small loans under the CMSME sector while offering the special exit facility.
Bangladesh Bank has directed finance companies to take necessary steps, including informing eligible borrowers about the scheme. The special exit facility will remain effective until December 31, 2026.
