Money Recovery in Bangladesh: Suits, Cheques, Commercial Courts and Enforcement in 2026

Money recovery in Bangladesh: choosing the route

Money recovery in Bangladesh is rarely a single proceeding. A creditor chasing an unpaid invoice, a defaulted loan, a bounced cheque or an arbitral award usually has several routes available, each with its own forum, deadline, cost and leverage. The right choice depends less on the size of the debt than on what the creditor holds: a signed contract, a cheque, a security interest, an arbitration clause, a public-sector counterparty, or simply a ledger and a string of emails. Choosing badly can cost years; missing a limitation date can cost the claim.

This guide sets out how recovery actually works in 2026: the legal notice, the money suit and the new commercial courts with their summary judgment procedure, court fees and limitation, cheque dishonour under the Negotiable Instruments Act 1881, the Artha Rin Adalat for banks and financial institutions, certificate proceedings under the Public Demands Recovery Act 1913, arbitration, winding-up petitions as pressure, attachment before judgment, execution, and recovery across borders. It closes with realistic timelines and costs.

Summary: Unsecured commercial creditors usually recover through a money suit, now filed in the commercial courts under the Commercial Courts Act 2026 with pre-suit mediation, case management, a ninety-day final hearing target and summary judgment. Cheque holders can add a criminal complaint under section 138 of the Negotiable Instruments Act; banks use the Artha Rin Adalat; government dues go through certificate proceedings; and arbitration awards are enforced as decrees. Limitation is generally three years, and execution is where most recoveries are won or lost.

Key point: The 2026 reforms changed the economics of debt claims. Commercial courts can give summary judgment where the defence has no real prospect of success, award pre-judgment interest and post-judgment interest at two per cent above bank rate, order costs against the losing party and require a judgment debtor to disclose its assets.

At a glance

Swipe or scroll →

Table of Contents

Money recovery in Bangladesh: choosing the route

Before drafting anything, a creditor should answer five questions. Who is the debtor: an individual, a company, a bank borrower, a government body or a foreign entity? What documents prove the debt: a signed contract, invoices with delivery records, an acknowledgment, a cheque, a guarantee? Is there security, such as a mortgage, hypothecation, lien or bank guarantee? Does the contract contain an arbitration clause? And how old is the debt, measured against limitation?

Those answers point to the forum. A dishonoured cheque opens a criminal route that runs alongside any civil claim. A bank or financial institution must use the Artha Rin Adalat. An arbitration clause takes the dispute away from the courts except for interim measures and enforcement. A public body owing money attracts its own notice rule. Everything else is, in most cases, a money suit, and since 2026 a commercial money suit belongs in the commercial courts.[3]

The practical rule we apply is that money recovery in Bangladesh works best when two or more pressure points operate at once: a civil claim for the debt, a criminal complaint on a cheque, an application to attach assets, or a statutory demand that threatens winding-up. Debtors pay the creditor who makes non-payment most uncomfortable.

Step one: the legal notice and demand

A formal demand is not a precondition to most civil suits, but it is almost always worth sending. It fixes the amount claimed, starts the interest argument, tests whether the debtor disputes the debt and, if ignored, becomes evidence of default. Our guide to legal notices in Bangladesh covers form and service.

Three notices are mandatory and time-critical:

• Cheque dishonour: the payee must demand payment in writing within thirty days of receiving the bank's information that the cheque was returned unpaid, and the drawer then has thirty days to pay.[6]
• Suits against government: a suit against the government or a public officer for an act in an official capacity may be filed only after two months from delivery of written notice stating the cause of action and relief claimed.[1]
• Statutory demand on a company: a company is deemed unable to pay its debts if a creditor owed more than Tk 500 serves a written demand at its registered office and the company neglects for three weeks to pay, secure or compound the debt.[9]

A notice should state the principal, the contractual interest, the basis of the claim and a short deadline, and it should be sent by a method that produces proof of delivery. Avoid overstating the claim: an inflated demand hands the debtor an argument that the debt is disputed.

Money recovery in Bangladesh through the commercial courts

Which court

The Commercial Courts Act 2026, deemed effective from 1 January 2026, created specialist commercial courts staffed by District and Additional District Judges, with appeals and revisions to commercial appellate benches of the High Court Division. Its definition of commercial dispute covers ordinary transactions of traders, bankers, financial institutions and merchants, import and export of goods and services, carriage of goods, construction and infrastructure contracts, sale of goods and supply of services, agency, distribution, franchise, joint venture and shareholder agreements, insurance and arbitration-related matters, among others. Matters within the Artha Rin Adalat or the High Court Division's original jurisdiction are excluded.[3]

Most claims for money recovery in Bangladesh between businesses therefore now start in a commercial court. A dispute does not cease to be commercial merely because the counterparty is a government body or because immovable property is held as security.[3] Pending commercial suits in the ordinary civil courts are transferred to the commercial court where one has been constituted.[3]

How a commercial money suit runs

• Pre-suit mediation: where no urgent interim relief is sought and government rules for it are in force, the plaintiff must first attempt pre-suit mediation; a signed settlement can be treated as a decree.[3]
• Pleading interest: a plaintiff claiming interest must set out the details of the interest claim in the plaint.[3]
• Suit management: at the first hearing after the written statement, the court identifies the issues, decides whether documentary evidence suffices, limits witnesses and sets a timetable.[3]
• Limited adjournments: each party may seek time at most three times before final hearing, on cause shown and with costs.[3]
• Ninety-day final hearing: the final hearing must be completed within ninety days of the date fixed for it, with costs against a party whose conduct causes delay.[3]
• Appeal: only the final judgment is appealable, within sixty days to the High Court Division, although revision and review remain available against other orders.[3]

Summary judgment

Before 2026, Bangladeshi creditors had almost no summary route. Order XXXVII of the Code of Civil Procedure provides a summary procedure for suits on bills of exchange, hundis and promissory notes, under which the defendant may defend only with leave, but it applies only in the High Court Division and the District Court.[2] Section 10 of the Commercial Courts Act 2026 now allows any party, after service of summons, to apply for summary judgment. The court must fix a hearing within fifteen days and may give judgment on the pleadings and documents if the claim or defence has no real prospect of success and oral evidence is unnecessary.[3]

For a creditor with a signed contract, delivery records and an acknowledgment of the balance, this is the most significant change in money recovery in Bangladesh for decades. The application should be supported by a tight documentary bundle and should anticipate the defences debtors habitually raise: quality complaints first made after the demand, alleged oral variations and set-off claims without particulars.

Interest and costs

Unless the parties agree otherwise, a commercial court may add interest from the date the dispute arose to judgment at the contract rate or a rate it fixes, and post-judgment interest runs at two per cent above the Bangladesh Bank rate unless the judgment says otherwise. Costs, including court fees, lawyers' fees and witness expenses, generally follow the event.[3] In ordinary civil suits, section 34 of the Code of Civil Procedure gives the court discretion over pre-decree and post-decree interest; if a decree is silent on further interest, it is deemed refused.[1]

Court fees, valuation and limitation

Court fees

A money suit is valued at the amount claimed, and the plaint attracts an ad valorem court fee on a sliding scale. Above Tk 50,000 the fee rises by Tk 57 for every Tk 5,000 or part, roughly 1.1 per cent at the margin, but the maximum fee on a plaint or memorandum of appeal is Tk 35,000.[4] For large claims the court fee is therefore modest; the real costs are legal fees, time and the cost of execution.

Limitation

Limitation is the commonest reason creditors lose good claims for money recovery in Bangladesh. Under the First Schedule to the Limitation Act 1908, the period is generally three years: from delivery for the price of goods sold without a fixed credit period, from expiry of the credit period where one was agreed, from the date of the loan for money lent payable on demand, from the date accounts are stated in writing, and from breach for compensation under an unregistered contract. A registered written contract attracts six years.[5]

Two provisions can restart the clock. A written acknowledgment of liability signed by the debtor before the period expires starts a fresh period from the date of signature, and so does a part payment made before expiry, provided it is acknowledged in writing.[5] Creditors negotiating with slow payers should obtain signed balance confirmations as a matter of routine. Section 5, which allows late appeals and certain applications for sufficient cause, does not rescue a suit filed out of time.[5]

Cheque dishonour under section 138

A dishonoured cheque is one of the strongest tools for money recovery in Bangladesh because it exposes the drawer to criminal liability. Where a cheque is returned for insufficient funds or because it exceeds the arranged amount, the drawer commits an offence punishable with imprisonment of up to one year, a fine of up to three times the cheque amount, or both.[6]

The four deadlines

1. Present the cheque within six months of its date or within its validity, whichever is earlier.
2. Serve written notice of demand within thirty days of learning of dishonour, by hand delivery, registered post with acknowledgment due, or publication in a widely circulated Bangla national daily.
3. Allow the drawer thirty days from receipt of notice to pay.
4. File the complaint within one month of the date the cause of action arises after that thirty-day period expires.[6]

Courts, appeals and civil rights

Under the Negotiable Instruments (Amendment) Act 2026, cases where the cheque exceeds Tk 5 lakh are tried by a Joint Sessions Judge or Metropolitan Joint Sessions Judge, and smaller cases by a Metropolitan Magistrate or Magistrate of the first class.[6] A convicted drawer cannot appeal without first depositing at least fifty per cent of the cheque amount, any fine realised up to the cheque's face value is paid to the holder, and the holder keeps the right to sue in the civil court for any unrealised balance.[6] Where the drawer is a company, the persons in charge of and responsible for its business are also liable, subject to a defence of lack of knowledge or due diligence.[6]

The criminal case is leverage, not a collection mechanism in itself. Its real value is that it brings the drawer to court quickly and personally, which is often when settlement happens. See our guides to cheque dishonour in Bangladesh and security cheque cases.

Banks and financial institutions: the Artha Rin Adalat

Every suit by a financial institution to recover a loan must be filed in, and decided by, the Artha Rin Adalat under the Artha Rin Adalat Ain 2003, including mortgage suits for sale or foreclosure.[7] The definition of financial institution covers Bangladesh Bank, scheduled banks, state-owned specialised banks, non-bank financial institutions and listed development finance institutions such as the IFC, CDC, Islamic Development Bank and Asian Development Bank.[7]

The regime contains several features ordinary creditors do not have. A lender holding pledged or liened property, or a mortgage or hypothecation with a power of sale, must generally sell it, or try and fail to sell it, and adjust the proceeds before suing.[7] Section 46 sets its own filing deadlines tied to recovery against the repayment schedule.[7] In execution, the court may commit a judgment debtor to civil prison for up to six months to compel payment, and where the debtor is a company or firm, the natural persons who compose it may be detained.[7]

For borrowers, the pre-suit sale requirement and the filing deadlines are frequent grounds of defence, and for lenders they are frequent causes of delay. Our guide to the Artha Rin Adalat explains the procedure for lenders and borrowers.

Government dues: the Public Demands Recovery Act 1913

Government departments and statutory bodies recover public demands through certificate proceedings rather than suits. The requiring authority sends a requisition to the Certificate Officer, who files a certificate that operates like a decree; the Certificate Officer then acts much like an executing court.[8] Financial institutions may also use certificate proceedings for smaller claims: the High Court Division has confirmed that section 5(5) of the Artha Rin Adalat Ain allows a lender to choose a certificate case instead of an Artha Rin suit where the outstanding amount does not exceed Tk 5 lakh.[8]

The same decision shows the limits of the process. The Certificate Officer must check that the requisition is in the prescribed form and that the amount is actually recoverable, and interest after the certificate is filed runs only as the Act provides.[8] Debtors facing certificate proceedings should scrutinise the requisition carefully. Our analysis of the Public Demands Recovery Act covers objections and remedies.

Arbitration: recovering under an arbitration clause

Where the contract contains an arbitration clause, a creditor that sues in court risks a stay. Arbitration under the Arbitration Act 2001 produces an award that, once the sixty-day period to apply to set it aside has passed or a challenge has been refused, is enforced as a decree of the court.[10] The Act also allows the court, before or during arbitration and until enforcement, to grant interim measures such as orders restraining transfer of property intended to defeat enforcement, interim custody of goods and the appointment of a receiver.[10] Unless the award directs otherwise, the sum awarded carries interest at two per cent above the bank rate from the date of the award.[10]

For straightforward debts, arbitration is not always the better route. Fees for the tribunal are borne by the parties, and the summary judgment procedure in the commercial courts may now be faster for an undisputed invoice. The choice is made at the drafting stage, so suppliers and lenders should think about it before they sign. See our guide to enforcing arbitral awards in Bangladesh.

Winding-up petitions as pressure

A company may be wound up by the court if it is unable to pay its debts, and it is deemed unable to do so if a statutory demand for more than Tk 500 is ignored for three weeks or if execution of a decree is returned unsatisfied in whole or in part.[9] The threat of a petition, with the reputational and banking consequences it carries, can move a solvent but recalcitrant debtor faster than a money suit.

It is a pressure tool to be used with care. A petition presented on a genuinely disputed debt risks dismissal, often with costs, and a winding-up order benefits all creditors rather than the petitioner alone. The petition works best where the debt is clear, the debtor is solvent enough to pay, and the creditor is prepared to proceed if it does not. Our guide to winding up a company in Bangladesh explains the procedure.

Attachment before judgment and interim protection

The biggest risk in a contested claim is that the debtor's assets disappear while the case is pending. Order XXXVIII of the Code of Civil Procedure allows the court, at any stage of a suit, to require a defendant to furnish security, or to attach property, where it is satisfied by affidavit or otherwise that the defendant intends to obstruct or delay execution of any decree by disposing of property or removing it from the court's jurisdiction. It also permits arrest before judgment of a defendant who is absconding or about to leave the jurisdiction with intent to delay the plaintiff.[2]

The evidence must be specific: listings of property for sale, transfers to relatives, closure of bank accounts or relocation of stock. A generic allegation that the debtor "may" dispose of assets will fail. Where the claim is in arbitration, the equivalent relief is sought under section 7A of the Arbitration Act 2001.[10]

Execution: turning a decree into money

Execution is where money recovery in Bangladesh is most often won or lost. A decree is enforced by attachment and sale of the debtor's property, garnishment of debts owed to it and, in some cases, arrest and civil detention.[1] An application for execution must generally be made within three years of the decree, or six years where a certified copy of the decree has been registered.[5]

Two 2026 reforms help. The Code of Civil Procedure (Amendment) Act 2026 allows execution petitions to be filed within the original suit rather than as separate execution cases, and introduces summons by SMS and voice call and pleadings on affidavit.[13] In commercial cases, the court may also order the judgment debtor, and any public or private person or authority, to provide information identifying the debtor's property.[3] A creditor should arrive at execution with an asset map already prepared: land records, vehicles, bank accounts, receivables from known customers and shareholdings. Our guide to execution cases in Bangladesh covers the process step by step.

Recovering from and against foreign parties

Foreign creditors with Bangladeshi debtors

Under section 45 of the Arbitration Act 2001, a foreign arbitral award is enforced by the court on application, in the same manner as if it were a decree of the court.[10] Two 2026 High Court Division decisions show the traps. In Jess Smith and Sons Cotton v Patriot Spinning Mills (26 February 2026), a cotton seller held a 2012 ICA award for about US$511,000 but applied to enforce it 3,155 days late. The court applied the three-year limitation period for executing decrees, held that the delay could not be condoned, and noted that wrong legal advice is not sufficient cause.[11]

In Legend World Tank v Multinational Shipping (12 July 2026), a creditor in a Singapore-seated SIAC arbitration sought interim protection over assets in Bangladesh under section 7A. The court held itself bound by a larger bench decision that section 7A does not extend to foreign-seated arbitrations before the enforcement stage, dismissed the application and vacated the interim order, leaving any reconsideration to the Appellate Division or a larger bench.[12] A foreign creditor that expects to enforce in Bangladesh should therefore consider a Bangladeshi seat, or at least plan for asset preservation from the outset.

Foreign judgments

A foreign court judgment is conclusive on matters directly adjudicated unless it falls within the exceptions in section 13 of the Code of Civil Procedure, such as want of jurisdiction, a decision not on the merits, breach of natural justice, fraud or a claim founded on a breach of Bangladeshi law. Under section 44A, whose heading refers to the United Kingdom and other reciprocating territories, a money decree of a superior court of a territory notified by the government may be executed directly in a District Court; other foreign judgments must be sued on afresh.[1]

Bangladeshi creditors with foreign debtors

For exporters and service providers chasing overseas buyers, the practical answer usually lies in the contract and the payment structure rather than in Bangladeshi courts. A letter of credit or confirmed payment terms avoid the problem; an arbitration clause with a seat in a New York Convention state gives an award enforceable where the debtor has assets; and a Bangladeshi judgment will need to be recognised under the law of the debtor's country. Our cross-border judgment enforcement and asset recovery practice coordinates these steps.

How money recovery in Bangladesh unfolds in practice

A typical contested commercial claim follows a recognisable sequence.

Swipe or scroll →

Timelines and costs

The last comparable benchmark, the World Bank's Doing Business 2020 profile, put commercial dispute resolution in Bangladesh at 1,442 days and 66.8 per cent of the claim value, ranking Bangladesh 189th for enforcing contracts.[14] The case backlog remains heavy: 4,041,924 cases were pending in subordinate courts at 31 December 2025, according to the Law Minister.[13] The commercial courts' ninety-day final hearing rule and summary judgment are designed to cut those figures sharply for business claims, but contested execution can still take longer than the suit.

The cost profile follows the route. Court fees are capped at Tk 35,000 per plaint, so the main expense is legal work.[4] A cheque case is comparatively inexpensive and quick to start. Arbitration carries tribunal fees but offers finality. Execution is labour-intensive and should be budgeted separately.

Comparing the main recovery routes

The table below compares the principal routes for money recovery in Bangladesh. On a phone, scroll it sideways.

Practical checklist for creditors in 2026

• Diarise limitation from the earliest invoice or breach date, and collect signed balance confirmations to restart it.
• Check for an arbitration clause before filing anything in court.
• Present dishonoured cheques promptly and calendar the thirty-day notice and one-month complaint deadlines.
• Send a precise legal notice, with the two-month notice for government defendants and a statutory demand for companies.
• Assess whether summary judgment in the commercial court is realistic on the documents you hold.
• Seek attachment before judgment where there is concrete evidence of asset flight.
• Map the debtor's assets before judgment, so execution can start the day the decree is signed.
• For foreign awards, file for enforcement well within three years and plan interim protection early.

Effective money recovery in Bangladesh rewards preparation more than aggression. Explore our commercial litigation practice, our guide to contract enforcement in Bangladesh, or contact TRW to discuss a debt.

Frequently asked questions

How do I recover money owed by a company in Bangladesh?

Send a legal notice, then file a money suit in the commercial court, seeking summary judgment where the debt is clear. A statutory demand under the Companies Act 1994 and a winding-up petition can add pressure.[3] [9]

Is a legal notice compulsory before a money suit?

Generally not, but it is mandatory for cheque dishonour complaints and for suits against the government or public officers, which require two months' prior written notice.[1] [6]

What is the limitation period for recovering a debt?

Usually three years, running from delivery, expiry of credit, the loan date or breach depending on the claim; six years for a registered written contract. A signed acknowledgment or part payment before expiry restarts the period.[5]

Is there summary judgment in Bangladesh?

Yes. Section 10 of the Commercial Courts Act 2026 allows summary judgment where a claim or defence has no real prospect of success and oral evidence is unnecessary. Order XXXVII of the Code of Civil Procedure also applies to suits on negotiable instruments in the High Court Division and District Court.[2] [3]

How much is the court fee for a money suit?

An ad valorem fee on a sliding scale, capped at Tk 35,000 per plaint or memorandum of appeal.[4]

What happens if a cheque bounces in Bangladesh?

The payee must give written notice within thirty days; if unpaid within thirty days of notice, a complaint may be filed within one month. The drawer faces up to one year's imprisonment, a fine up to three times the cheque amount, or both.[6]

Can a bank use an ordinary money suit?

No. Loan recovery suits by financial institutions must be filed in the Artha Rin Adalat, though certificate proceedings are available for claims up to Tk 5 lakh.[7] [8]

Can I freeze a debtor's assets before judgment?

Yes, under Order XXXVIII of the Code of Civil Procedure, if you show by affidavit that the debtor is about to dispose of or remove property to obstruct execution.[2]

How long do I have to enforce a foreign arbitral award?

The High Court Division applied a three-year period in February 2026 and refused to condone a delay of 3,155 days, so file promptly after the award.[11]

How long does money recovery take in Bangladesh?

Historically several years: the World Bank's 2020 benchmark was 1,442 days. Commercial courts now aim to finish the final hearing within ninety days of the date fixed, but execution can add significant time.[3] [14]