The Bangladesh Bank has introduced an exit policy allowing defaulted borrowers up to three years to repay loans with a 10% down payment, aiming to maintain liquidity and reduce toxic loans in the banking sector. This policy, not considered as debt rescheduling or restructuring, restricts borrowers from obtaining new credit until the existing loan is fully repaid. Banks will set the repayment instalment period, allowing multiple payments within three years. The policy mandates consistent criteria across banks, replacing previous disparate methods.
Borrowers using the exit facility will remain classified as defaulters until full repayment, with banks marking exit statuses in the Credit Information Bureau. The policy benefits both small and large borrowers, and includes interest waivers, with provisions to reinstate waived interest if repayment fails. The total defaulted loans in the sector stood at over Tk 1.82 lakh crore, representing 11.11% of total disbursed loans as of March 2024.
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