Bangladesh Bank has issued a policy to enlist mediation institutions for resolving disputes involving defaulted loans of banks and financial institutions. The Banking Regulation and Policy Department-2 issued the policy on Thursday, aiming to strengthen loan recovery and reduce the number of related cases pending before courts. Under the alternative dispute resolution, or ADR, framework, lenders and borrowers may choose any institution enlisted by the central bank before filing a case or while a case is ongoing.

Applicants must be registered under specified laws, hold an updated trade licence and tax identification number, and have at least three years of business or professional experience. They must also submit three years of audited financial statements and conduct all financial transactions through one or more separate bank accounts. Institutions, board members, or chief executives linked to bankruptcy, loan default, fraud, corruption, embezzlement, money laundering, or serious criminal convictions are ineligible.

Each enlisted institution must maintain one or more mediation panels with at least five mediators, including an accountant and a legal expert. Mediators need at least 10 years of relevant experience, while politically influential persons are barred. Enlistment will last three years, subject to renewal, monitoring, annual reporting, and possible suspension or cancellation for violations.