Photo: Collected

DHAKA, Aug 20, 2026 (BSS) - Bangladesh Bank (BB) has formulated a comprehensive policy titled "Alternative Dispute Resolution (ADR) Mediator Institution Enlistment Policy, 2026" aimed at expediting the recovery of defaulted loans and reducing the backlog of court cases in the country's financial sector.

The central bank issued a circular today, directing all scheduled banks, finance companies and intermediary institutions operating in Bangladesh to comply with the guidelines immediately.

The policy has been issued under the powers conferred by Section 45 of the Bank Company Act, 1991 and Section 41 of the Finance Company Act, 2023.

Under the new policy, Bangladesh Bank will enlist qualified, capable and experienced mediator institutions to establish a modern and sustainable ADR mechanism for resolving financial disputes.

The initiative is also intended to enhance public confidence in mediation and ensure professional and ethical standards in dispute settlement.

To qualify for enlistment, an applicant institution must be registered under the Societies Registration Act, 1860, the Partnership Act, 1932, or the Companies Act, 1994. 

It must also have an updated trade licence and Tax Identification Number (TIN), along with at least three years of professional or business experience.

Members of the institution, its board of directors and its chief executive officer must not be bankrupt, loan defaulters or convicted of serious offences including fraud, corruption, embezzlement or money laundering.

The institutions must have a governing board or administrative council, with at least 50 percent of its members qualified to act as mediators. 

They must also maintain a separate ADR unit, standard operating procedures and a human resource management system.

Each mediator institution must maintain at least one panel comprising a minimum of five mediators, including at least one accountant and one legal expert. Politically Exposed Persons (PEPs) will not be eligible to serve on mediator panels.

A mediator must have at least 10 years of experience in banking, finance companies, law, accounting, auditing or judicial services. Mediators must also have no conflict of interest with disputing parties and must have clean professional records.

The policy also requires enlisted institutions to organise at least two ADR training programmes and one skill-development workshop annually.

Each paneled mediator must complete at least 20 hours of Continuing Professional Development (CPD) every year.

The institutions must maintain adequate physical and digital infrastructure, including designated mediation rooms, confidential meeting facilities, virtual hearing arrangements, a digital Case Management System (CMS), cybersecurity measures and regular data backup and recovery systems.

Bangladesh Bank will assess applications under a 100-mark scoring system, with applicants required to obtain at least 70 marks for enlistment. The initial enlistment will remain valid for three years, while applications for renewal must be submitted at least 90 days before expiry.

Enlisted institutions will have to submit annual reports to BRPD-2 within two months after the end of each calendar year, providing information on disputes received, ongoing and resolved cases, average settlement time, training activities and financial statements.

Bangladesh Bank will have the authority to conduct on-site inspections and examine the records of enlisted institutions. It may take action, including warnings, financial penalties, suspension or cancellation of enlistment, in cases of serious irregularities, corruption or violations of the policy.

The central bank has also retained the authority to amend, modify or relax provisions of the policy in the interest of the country's financial sector.