Bangladesh Bank has announced a special exit facility allowing defaulting borrowers to settle their dues in one payment with relaxed conditions for interest waivers. The circular, issued on Monday to all scheduled banks, aims to reduce non-performing loans and enhance banks’ capacity to issue new credit. The central bank stated that borrowers facing financial difficulties but still capable of operating their businesses and willing to repay will be eligible for this one-time exit option.

According to the circular, loans classified as substandard or bad up to June 30 of the current year will qualify for the facility, subject to board approval based on banker–customer relationships. The requirement for banks to recover their cost of funds before waiving interest has been eased, and both state-owned and private banks may now offer interest waivers. The policy also prioritizes short-term agricultural loans and CMSME sector loans.

The directive, issued under the Bank Company Act 1991, will remain effective until December 31. Bangladesh Bank expects the measure to help reduce bad loans and support production, investment, and employment growth.