Defaulters allowed 3-year exit facility with 10% down payment | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Saturday
June 14, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
SATURDAY, JUNE 14, 2025
Defaulters allowed 3-year exit facility with 10% down payment

Banking

TBS Report
08 July, 2024, 09:00 pm
Last modified: 09 July, 2024, 12:11 am

Related News

  • Bundle worth Tk2,000 priced at Tk3,500: New currency notes scarce at banks, sold at inflated prices in open market
  • Freshly designed banknotes hit Dhaka banks tomorrow
  • Agricultural credit recovery increases by 8% in July-March 
  • BB asks banks to ensure smooth ATM, MFS services during Eid vacation
  • Bangladesh repays $3.5b foreign debt in 10 months of FY25

Defaulters allowed 3-year exit facility with 10% down payment

The exit facility will not be considered debt rescheduling or restructuring, and borrowers will be ineligible for any new credit until the existing loan is fully repaid

TBS Report
08 July, 2024, 09:00 pm
Last modified: 09 July, 2024, 12:11 am
File photo of Bangladesh Bank. Photo: Mehedi Hasan/TBS
File photo of Bangladesh Bank. Photo: Mehedi Hasan/TBS

For the first time, the Bangladesh Bank has introduced an exit policy allowing defaulted borrowers up to three years for loan repayment with a 10% down payment, aimed at maintaining liquidity flow and reducing toxic loans in the banking sector.

The exit facility will not be considered debt rescheduling or restructuring, and borrowers will be ineligible for any new credit until the existing loan is fully repaid, according to a central bank circular issued today.

TBS Infographic
TBS Infographic

Banks will determine the loan instalment period, allowing borrowers to clear the dues through multiple payments within three years, the money market regulator stated in the circular, directing managing directors of banks to implement the policy.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

In the absence of a policy, banks used to follow different criteria for the exit mechanism for the collection and adjustment of loans, according to central bank officials.

A Bangladesh Bank official said even if defaulting borrowers utilise the exit facility, they will continue to be classified as defaulters until the entire loan is repaid. Banks will annotate the exit status next to these customers' statuses (classified under three types of non-performing loans) in the Credit Information Bureau.

The managing director of a private bank told TBS, "Defaulted borrowers will receive some benefits through the exit facility. If they manage to pay 10% of their defaults, they can repay the remaining amount over a period of three years."

He also mentioned that previously, there was a one-time exit policy for top borrowers, but many borrowers exited their loans under this facility without fully repaying them. Consequently, a significant portion of these loans remains in default.

Another official of the Bangladesh Bank mentioned that all types of small and large borrowers will benefit from this policy. Under this policy, both regular and defaulting borrowers can take advantage of the exit facility.

"This policy has been a long-term plan for us. Until now, each bank followed different rules. Now, with the specific policy in place, no customer above the specified limit will receive this benefit," he added.

According to the circular, the regular loan exit facility can be provided in cases where the project or business is closed due to uncontrollable reasons or by the borrower's decision to close the project or business.

Banks will settle applications within 60 days after receiving them from borrowers. The exit facility must be approved by the board of directors of each bank, although bank management will have the authority to grant the exit facility for loans up to Tk10 lakh.

Under this facility, interest can be waived according to the policy of the central bank. However, if the loan is not repaid within the stipulated time, the waived interest will accrue, and the exit facility will be cancelled. The instructions of the central bank will be followed in the recovery of the debt mortgaged under the exit facility.

Proper provisions must be maintained against the loan, and the security taken against the loan cannot be released before the loan is fully adjusted. However, the loan can be adjusted by selling the mortgaged property, with customer-negotiable loans against the bank.

According to data from the Bangladesh Bank, as of the end of March 2024, the total amount of disbursed loans in the banking sector stood at nearly Tk16.41 lakh crore. Out of this, over Tk1.82 lakh crore had become defaulted, which is 11.11% of the total disbursed loans.

In 2019, the central bank issued a special policy regarding a one-time exit for customers with loans over Tk500 crore. According to the policy, the loan is to be repaid over 10 consecutive years with a grace period of one year, at 9% simple interest, with a 2% down payment.

Top News

debt / Bangladesh Bank / Policy

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Burnt out cars and damaged buildings are all that’s left of this street in Ramat Gan Credit: AP
    Iran threatens to strike US, UK, and French bases if they help defend Israel
  • Chief Adviser Professor Muhammad Yunus of the Bangladesh interim government. Sketch: TBS
    UK lawyers hired to recover stolen money: CA Yunus
  • File Photo: Rajib Dhar
    Dengue claims one life, 169 hospitalised in 24hrs

MOST VIEWED

  • Energy adviser Fouzul Kabir Khan with other government officials during a visit to Sylhet gas field on 13 June 2025. Photo: TBS
    I would disconnect gas supply to every home in Dhaka if I could: Energy adviser
  • BNP Acting Chairperson Tarique Rahman and Chief Adviser  Muhammad Yunus meet at Dorchester Hotel in London, UK on 13 June 2025. Photo: CA Press Wing
    National polls possible in 2nd week of February, agree Yunus, Tarique in 'historic' London meeting
  • Rescuers work at the scene of a damaged building in the aftermath of Israeli strikes, in Tehran, Iran, June 13, 2025. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS
    Tehran retaliates with 100 drones after Israel strikes Iran's nuclear facilities, kills military leaders
  • From fact-checker to fact-checked: CA Press Wing’s turn in the hot seat
    From fact-checker to fact-checked: CA Press Wing’s turn in the hot seat
  • UK Prime Minister Keir Starmer, Chief Adviser Muhammad Yunus
    Disclosure of unconfirmed Yunus-Starmer meeting shows ‘diplomatic imprudence’: Analysts
  • Flight AI 379 had landed. File Photo: Hindustan Times
    Day after Ahmedabad crash, Air India flight makes emergency landing in Thailand after bomb threat

Related News

  • Bundle worth Tk2,000 priced at Tk3,500: New currency notes scarce at banks, sold at inflated prices in open market
  • Freshly designed banknotes hit Dhaka banks tomorrow
  • Agricultural credit recovery increases by 8% in July-March 
  • BB asks banks to ensure smooth ATM, MFS services during Eid vacation
  • Bangladesh repays $3.5b foreign debt in 10 months of FY25

Features

Photos: Collected

Kurtis that make a great office wear

1d | Mode
Among pet birds in the country, lovebirds are the most common, and they are also the most numerous in the haat. Photo: Junayet Rashel

Where feathers meet fortune: How a small pigeon stall became Dhaka’s premiere bird market

3d | Panorama
Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

3d | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

5d | Features

More Videos from TBS

Major General Hatemi is the new chief of staff of Iran's army

Major General Hatemi is the new chief of staff of Iran's army

42m | TBS World
Israel-Iran conflict: 45-year enmity now taking full military form

Israel-Iran conflict: 45-year enmity now taking full military form

47m | Others
How did the United States help prevent an Iranian attack?

How did the United States help prevent an Iranian attack?

2h | TBS World
Why does Bangladesh lack a plan for its overseas labour market?

Why does Bangladesh lack a plan for its overseas labour market?

57m | TBS Programs
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net