Update CIB on default loans duly or pay penalty

Banks and finance companies risk getting punished by the regulator if they fail to update the Credit Information Bureau (CIB) on their clients' credit status vis-a-vis default loans within the stipulated timeframe.

Issuing a circular Wednesday -- in the wake of bad-loan buildups -- the bureau of Bangladesh Bank stated that the commercial banks and finance companies will have to update the monthly information on defaulted loans to the CIB within 15 days of the subsequent month.

In terms of any change, it says, the banks and finance institutions will be able to make any correction, exclusion and inclusion before the re-uploading of 'error-free file' within the next seven working days of the initial upload.

If the institutions fail to update the error-free information on their clients' default loans, it adds, they will have to inform the bureau in prescribed form officially by explaining the reasons of the failure.

"If the CIB of the central bank is not satisfied with the explanation, the banks and financial institutions will face maximum financial penalty worth of Tk 0.5 million and the officials concerned will have to come under disciplinary actions," says the circular, tightening the noose for the defaulters and the lenders both.

And the amount of the financial penalty will be deducted from the institutions' account with the Motijheel office of the central bank, according to the statement.

jubairfe1980@gmail.com