Banks can write off small loans up to Tk 5 lakh

Banks can write off loans up to Tk 5 lakh in the agriculture, cottage, micro, small and medium enterprise, and other sectors without filing any court cases, said the central bank yesterday. 

The directive from the Bangladesh Bank came as the expenses of continuing loan-related lawsuits are found to be often higher than the outstanding loan amount picked for write-off. 

But if it does not merit a mandatory case under the money loan court laws, loans up to Tk 5 lakh can be written off without filing any cases, said the BB in a notice.

In 2019, the BB instructed banks to file lawsuits at the money loan courts before writing off loans. It, however, also said loans up to Tk 2 lakh could be written off without filing any court cases.