Business Desk : dhakamirror.com
The Bangladesh Bank on Wednesday asked banks to ensure obtaining thumb print and signatures of borrower and guarantors in relevant loan documents.
The Bangladesh Bank issued a circular on Wednesday with an aim to streamline the loan recovery process.
The new directive, issued under Section 45 of the Banking Companies Act, 1991, aims to address emerging legal complexities in loan recovery procedures.
As per the circular, borrowers seeking loans from banks will now be required to submit specific charge documents based on their borrower status, loan type and collateral.
The central bank has provided a comprehensive list of the necessary charge documents in its ‘Guidelines on Credit Risk Management’ and these documents must be submitted in a prescribed format.
The need for this directive arose when the High Court observed that many loan recipients and guarantors were not providing their signatures on the relevant charge documents related to loan disbursement and guarantee provision. The absence of signatures created obstacles in the legal process of loan recovery,
Therefore, it became indispensable to rely on the signatures of the borrower and the guarantor in the relevant charge documents to verify the accuracy and authenticity of the respective charge documents, which create obstacles in the legal process of loan recovery.
To mitigate the emerging legal complexities in loan recovery, the subject matter in the received/required documents must be ensured to be read and heard by relevant third party or parties, including the loan recipient and the guarantor.
Their signatures (where applicable) must be obtained on those documents.
Additionally, their fingerprints must be taken from both hands’ thumbs to cross-verify with national identity card database, it said.
The new directive will significantly expedite the loan recovery process and reduce legal disputes related to loan defaulters, BB officials said.
By obtaining the necessary signatures and fingerprints, the banks will be able to verify the accuracy and authenticity of the charge documents, leaving no room for ambiguity in loan recovery proceedings, they said.
