The Bangladesh Bank is attempting to limit the ability of bank boards of directors to waive interest on loans without consulting the appropriate departments. It told the banks that, in the event of an interest waiver, they must seek the head of internal control and compliance’s (HICC) view via the internal audit division. Bank loan interest may be waived in whole or in part due to a variety of uncontrollable circumstances, including the death of the borrower, natural disasters, epidemics, floods, due to distress, or canceled projects.
However, it has lately come to light that banks frequently waive the interest of a variety of consumers without taking these unique situations into account. The new guidelines should be adhered to in order to waive all types of interest in order to protect customers’ interests, maintain overall credit discipline, and raise customer awareness about the importance of paying bank dues within the allotted time frame.
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