Editorial, News & commercial office:
55/A, H M Siddique Mansion (Level-7), Purana Paltan, Motijhel C/A, Dhaka-1000. Phone: +8802226640056,
e-mail: [email protected], [email protected]
In a strategic push to fast-track the recovery of bad loans and ease the massive backlog of financial litigation pending before the courts, Bangladesh Bank has unveiled a comprehensive policy framework for enlisting specialized mediation institutions to conduct Alternative Dispute Resolution (ADR) across the banking sector.
The regulatory directive, titled "Policy Guidelines for Enlistment of Mediation Institutions for Alternative Dispute Resolution (ADR), 2026," was officially circulated on Thursday with immediate effect. Central bank authorities expressed optimism that onboarding competent, accredited ADR agencies will inject momentum into non-performing loan (NPL) resolution and significantly decongest the judicial apparatus.
The regulatory measure builds upon earlier supervisory directives—including BRPD Circular No. 11/2024 and BRPD-2 Circular Letter No. 02/2026—which encouraged banks and financial institutions to leverage ADR mechanisms. However, the financial sector previously lacked a structured, rigorous accreditation system to assess the technical competence, institutional capacity, and operational credibility of mediating entities. The new policy establishes standardized qualification criteria to govern ADR service providers.
Under the fresh framework, applicant organizations must be formally incorporated under the Societies Registration Act, the Partnership Act, or the Companies Act, supported by an up-to-date trade license, tax identification certification, and a verified institutional track record spanning at least three continuous years. Entities and their governing board members must carry an unblemished legal record, free from insolvency declarations, loan defaults, or convictions for financial fraud and corruption.
The framework mandates that every enlisted institution maintain an expert mediation panel comprising at least five certified professionals, including a qualified professional accountant and a licensed legal expert. Individual mediators must possess a minimum of ten years of professional experience across banking, non-banking financial institutions, corporate law, accounting, auditing, or judicial proceedings. In addition, mediators must not be categorized as loan defaulters or Politically Exposed Persons (PEPs).
To qualify for enlistment, institutions must furnish evidence of dedicated physical infrastructure, specialized mediation hearing rooms, automated digital case management workflows, secured virtual hearing capabilities, and robust cybersecurity architectures for data retention. They must also enforce formal policy frameworks addressing conflicts of interest, confidentiality management, professional codes of conduct, and grievance redressal mechanisms.
Bangladesh Bank will assess applications against a 100-point scoring matrix, requiring candidates to secure a minimum threshold of 70 points for enlistment. Successful applicants will receive accreditation for an initial three-year tenure, subject to renewal applications submitted at least 90 days prior to expiry. Enlisted entities are mandated to submit detailed annual operational reports within two months of each calendar year-end. The central bank reserves full supervisory authority to conduct inspections and suspend or revoke enlistments in instances of ethical breaches, regulatory non-compliance, or misrepresentation of data.
