Banks must now notify borrowers at least 30 working days before writing off any loan.
BB issued a circular in this regard on Sunday.
The central bank instructed all managing directors of scheduled banks to enforce the rule immediately.
The write-off process allows banks to remove long-standing non-performing loans (NPLs) from their balance sheets.
Under the new rules, any loan classified as bad or loss for two consecutive years may be written off, with older loans receiving priority.
Bangladesh Bank also said that borrowers will continue to be treated as defaulters until full repayment, even after a loan is written off.
The prior notice aims to ensure transparency and accountability in the write-off process.
Banks are permitted to offer cash incentives to officials for recovering written-off loans, either under existing policies or new ones approved by their boards.
As of March 2025, defaulted loans in the banking sector stood at Tk 4.20 lakh crore, with Tk 3.42 lakh crore鈥攐ver 81 per cent鈥攊n the bad or loss category.
The total written-off loans reached Tk 62,300 crore, according to the Financial Stability Report 2024.
Banks must also ensure 100 per cent provisioning before writing off loans, adjusting any shortfall from their current year鈥檚 income.
