Dhaka, Oct. 20 -- Banks will now be required to notify borrowers at least 30 working days in advance before writing off any classified loan, according to a new circular issued by Bangladesh Bank on Sunday.

The directive, which takes immediate effect, aims to bring greater transparency and accountability to the loan write-off process in the banking sector.

Loan write-off is a process through which banks remove long-overdue non-performing loans (NPLs) from their balance sheets while continuing recovery efforts.

The central bank's new rules make it mandatory for banks to inform borrowers beforehand, ensuring they are aware of their loan status and obligations even after the write-off.

According to the circular, banks can offer cash incen...