Photo: Collected

DHAKA, June 23, 2026 (BSS) - Bangladesh Bank (BB) has issued a new directive 
to modernize the country's retail lending operations by allowing scheduled 
banks to disburse consumer loan proceeds directly to vendors through digital 
channels, marking a significant shift from traditional paper-based settlement 
methods.

Under the Banking Regulation and Policy Department (BRPD) circular issued 
today, banks will now be able to use internal electronic fund transfers and 
the Real-Time Gross Settlement (RTGS) system to directly pay vendors for 
eligible consumer loans.

The central bank said that the move is aimed at enhancing operational 
efficiency, strengthening transaction security, and ensuring proper end-use 
of credit.

The new framework covers auto loans, housing finance, consumer durable loans, 
and loans for professionals. 

While existing provisions under the 2004 guidelines on paper-based 
instruments such as cheques and pay orders will remain in force, digital 
disbursement has been introduced as an additional mechanism to support faster 
and more secure transactions.

Bangladesh Bank emphasized that loan proceeds must not, under any 
circumstances, be credited to borrowers' accounts or disbursed in cash. 

The central bank said this measure is intended to reduce fund diversion risks 
and improve compliance with credit discipline.