Write-off policy relaxed for NBFIs as well | The Daily Star
12:00 AM, April 02, 2019 / LAST MODIFIED: 10:40 AM, April 02, 2019

Write-off policy relaxed for NBFIs as well

The central bank yesterday relaxed its write-off policy for non-bank financial institutions as it had done for banks on February 6 this year.

The NBFIs are now allowed to write off from their balance sheet default loans hovering in the bad category for three years, down from five years previously, according to a notice of Bangladesh Bank.

They also do not have to file any case with Artha Rin Adalat (Money Loan Court) to write off delinquent loans of up to Tk 2 lakh, up from Tk 50,000 previously.

The central bank usually adopts the same policies for banks and NBFIs on loan rescheduling, classification and write-offs, a Bangladesh Bank official said.

Experts earlier chastised the central bank's move, saying that the write-off policy would allow banks to artificially show lower default loans on their books.

The central bank introduced the write-off policy in January 2003 aiming to put the brakes on rising default loans.

But the move turned out to be a disappointment as banks and NBFIs failed to recover a majority of the written-off loans.

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