Bank Loan Laws in Bangladesh: Legal Requirements for Borrowers and Lenders (2026)

Bank loan laws Bangladesh borrowers sign up to in 2026

The bank loan laws Bangladesh borrowers sign up to in 2026 are a mix of old statutes and fast-moving central bank directions. The Bank Company Act 1991, as amended in 2023, sets the hard limits on who may borrow and on what terms. Bangladesh Bank circulars then fix how interest is priced, when a missed instalment becomes a classified loan, how much a bank may lend to one group and, since January 2026, the exact wording of the personal guarantee a bank must take.

This guide is written for the borrower, the guarantor and the director who signs on a company's behalf. It covers the requirements to obtain a loan, market-based interest and the new caps on penal interest and spreads, the documents and security a bank will demand, the 2026 uniform guarantee form, the 90-day classification rule and what it does to an account, and the routes out when repayment fails. Defaulter status, Artha Rin litigation, finance company licensing and foreign borrowing each have their own TRW guides, linked where they matter.

Summary: A bank loan in Bangladesh is governed by the Bank Company Act 1991 and the directions Bangladesh Bank issues under it, sitting on top of the Contract Act 1872, the Transfer of Property Act 1882 and the Companies Act 1994. Interest has been market-based since SMART was withdrawn in May 2024, but penal interest is capped at 0.5 per cent and most spreads at 4 per cent. Any loan 90 days overdue is classified, and banks must now use a single standard personal guarantee form.

Key point: Read the sanction letter before anything else. Since May 2024 it must say whether the rate is fixed or variable and, if variable, how many times and by how much it can rise in a year, and the bank may not charge a service charge above its declared rate. Section 30 of the Bank Company Act then bars a court from hearing a complaint that interest was excessive, so the negotiation at signing is the only real protection on price.

At a glance

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Table of Contents

The legal framework behind bank loan laws Bangladesh lenders apply

No single statute is called a loan law. The rules a borrower meets come from three layers, and a dispute is usually decided by how they fit together.

The Bank Company Act 1991

The Bank Company Act 1991 is the statute that controls lending by every scheduled bank. For borrowers, the key provisions are section 26Kha on exposure limits, section 27 on loans to persons connected with the bank, section 27KaKa on defaulting borrowers, section 28 on waiver of interest, section 29 on Bangladesh Bank's power to control advances, section 29A on collateral valuers and section 30 on interest disputes.[1] The 2023 amendment substituted the defaulter provisions in section 27KaKa, replaced section 28 and inserted section 29A.[1] Our overview of banking law in Bangladesh covers the Act's licensing, governance and resolution provisions.

Bangladesh Bank directions

Much of the bank loan laws Bangladesh borrowers deal with day to day is therefore secondary legislation. Section 29(2) lets Bangladesh Bank give binding directions on the maximum amount of advances, their purposes, the security and margin required, and the interest rate that may be charged; a bank that ignores them can be ordered to deposit money with the central bank.[1] Most of the operative detail, including classification, pricing and the guarantee form, therefore sits in circulars issued under sections 29, 45 and 49 rather than in the Act.[2] [3] [9] A circular can change the economics of an existing facility overnight, which is why borrowers should track them.

The general law of contract, property and companies

Beneath the banking rules sit the Contract Act 1872, which governs the loan contract and every guarantee, the Transfer of Property Act 1882, which governs mortgages, and the Companies Act 1994, which requires a company's charges to be registered.[12] [13] [14] Recovery runs through the Artha Rin Adalat Ain 2003, explained in our guide to Artha Rin Adalat proceedings. Loans from finance companies follow a parallel regime under the Finance Company Act 2023, covered in our NBFI licence guide.

The 2026 draft amendment

A further amendment to the Bank Company Act is in draft. As reported on 15 October 2026, the Financial Institutions Division said nothing had been finalised as of 4 October; the draft will go back to Bangladesh Bank and then to Cabinet.[11] One proposal matters directly to corporate borrowers: directors of a borrowing company would be barred from resigning, being removed or transferring shares without the lending bank's approval.[11] Until it is enacted, the 2023 text remains the law.

Legal requirements to obtain a bank loan

The bank loan laws Bangladesh banks must apply at origination fall into five groups: who the borrower is, whether it is already in default, whether it is connected with the bank, how large the exposure is, and how the security is valued.

Identity, tax and credit history

Under the bank loan laws Bangladesh lenders follow, every application starts with know-your-customer documents, a tax identification number and a Credit Information Bureau (CIB) report. Bangladesh Bank's 2026 credit card guidelines, for example, require a valid e-TIN certificate, a clean CIB report and full KYC compliance before a card is issued.[10] Corporate borrowers should expect to produce constitutional documents, audited accounts, cash-flow projections and the board resolution approving the facility. A CIB report that shows an overdue or classified facility elsewhere will normally stop an application before it reaches credit committee.

The bar on lending to defaulting borrowers

Section 27KaKa(3) prohibits any bank or financial institution from extending credit to a defaulting borrower. The exception is narrow: where a member of a related group is in default but is not a wilful defaulter, or Bangladesh Bank finds reasonable grounds for the failure, other group members are not treated as defaulters for that reason and may borrow only with Bangladesh Bank's prior approval.[1] Banks must also report defaulters to Bangladesh Bank, which circulates the lists to every lender.[1] The consequences of default status are covered in our guide to loan defaulters in Bangladesh.

Borrowers connected with the bank

Section 27 forbids lending against the security of the bank's own shares and prohibits unsecured loans to a director, a director's family member or a firm or company in which they have a significant interest or control. Any facility to such a person needs the approval of a majority of the other directors.[1] Section 28 adds that interest owed by those persons cannot be waived without Bangladesh Bank's prior approval; an unlawful waiver exposes the responsible directors and officers to up to three years' imprisonment, a fine of up to Tk 3 lakh, or both.[1] A borrower group with a seat on the lender's board should expect slower approvals and full collateral.

Single borrower and large loan limits

Section 26Kha caps total facilities to one person or group at the percentage of the bank's capital that Bangladesh Bank fixes, and never above 25 per cent.[1] On 14 May 2026 Bangladesh Bank suspended the 15 per cent funded limit until 30 June 2028, allowing aggregate funded and non-funded exposure up to 25 per cent of capital, and cut the conversion factor for letters of credit and guarantees to 0.25 until 30 June 2027, rising in steps to 0.50 by 31 December 2029.[8] For large groups this decides whether a facility needs a syndicate.

Valuation of collateral

Since the 2023 amendment to the Bank Company Act, any firm that values collateral for a bank borrower must be enlisted with Bangladesh Bank under section 29A.[1] The master circular on classification requires land and buildings to be valued by an enlisted firm where valuation is mandatory, and permits revaluation of immovable property no more often than every three years unless an economic downturn or similar evidence justifies it.[2] Borrowers should obtain the valuation report, because it fixes the security cover and often the margin.

How interest rates work after SMART

Pricing is the area where bank loan laws Bangladesh borrowers knew before 2024 have changed most. The SMART reference rate, introduced in June 2023 as an interim step, was withdrawn on 8 May 2024 by BRPD Circular No. 10, which declared that loan rates would be set "solely based on banker-customer relationship" and the supply and demand of loanable funds.[3]

Declared rates and the one per cent band

Each bank must declare sector-specific lending rates and may lend to an individual customer at up to one percentage point below or above the declared rate, depending on that customer's risk profile.[3] Declared rates are uploaded to Bangladesh Bank's data warehouse by the seventh day of each month.[3] Loans made under Bangladesh Bank or government refinance and incentive schemes follow the rate set by each scheme, not the market rate.[3] A borrower negotiating price should ask for the declared rate for its sector and argue its position within the band.

Fixed, variable and the sanction letter

The sanction letter must state whether the rate is fixed or variable. If variable, it must specify the maximum number of increases in a year and the maximum percentage of each.[3] A bank may not levy any service charge in excess of its declared interest rate.[3] These are the most useful pricing rights in the bank loan laws Bangladesh borrowers can invoke. A variable-rate sanction letter that is silent on the frequency or size of increases does not meet the circular, and a borrower facing a repricing should check the letter before accepting the bank's new figure.

Penal interest cut to 0.5 per cent

Penal interest was originally capped at 1.5 per cent. On 13 May 2026 BRPD-1 Circular Letter No. 17 reduced the maximum to 0.5 per cent with immediate effect, citing the global economic situation and the need to raise investment.[4] For a continuous or demand loan, such as an overdraft or cash credit, the penalty may be charged on the whole outstanding for the overdue period; for a term loan, only on the overdue instalment.[4] Overdue statements issued after 13 May 2026 that apply penal interest above the new cap should be challenged.

The 4 per cent spread cap

On 29 June 2026 Bangladesh Bank reintroduced a ceiling on the intermediation spread, the gap between a bank's weighted average lending and deposit rates. It noted that many banks had widened spreads excessively since market pricing began, hindering business and industry, and directed banks to keep the spread within 4 per cent for all lending other than credit cards and consumer finance.[5] The cap applies to the bank's portfolio average, not to an individual loan, but it limits how far rates can drift from deposit costs.

Credit cards

The March 2026 credit card guidelines cap the effective annual rate at 25 per cent, charged only on the unpaid amount due, not the total bill, and from the day after the payment due date, never from the transaction date. Any change to rates, fees or terms must be notified at least 30 days before it takes effect.[10]

Why the courts will not reopen the rate

Section 30 of the Bank Company Act provides that, notwithstanding any other law, no court may try a case between a bank and its borrower on the ground only that the interest, or in Islamic banking the profit or rent, charged was excessively high.[1] A borrower can still dispute arithmetic, unauthorised charges or a breach of a circular, but not the commercial level of a rate it agreed. Price must be won at the negotiating table.

Loan documentation: what the borrower signs

A standard facility is documented in layers. The table below sets out the main documents, what each does and what a borrower should check. On a phone, scroll it sideways.

The sanction letter and facility agreement

The sanction letter is the core loan document. It records the commercial terms: limit, purpose, tenor, rate basis, repayment schedule, security and conditions precedent. Larger facilities add a facility agreement with representations, covenants and events of default. The two should match. Where they differ, the borrower should require the conflict to be resolved before drawdown, because the bank will rely on whichever is stricter. Insist that both the sanction letter and the agreement record the fixed or variable rate mechanics required by BRPD Circular No. 10.[3]

Charge documents and post-dated cheques

Typical charge documents include a demand promissory note, a letter of continuity, letters of hypothecation over stock and receivables, a letter of lien over deposits and, for land, a registered mortgage with a power of attorney. Many banks also take undated or post-dated security cheques. Those cheques carry criminal exposure if dishonoured, as explained in our guide to cheque dishonour in Bangladesh. Borrowers should keep a signed list of every document and cheque handed over.

Corporate approvals

For a company, the bank will want a board resolution authorising the borrowing, the security and the signatories, together with the memorandum and articles to confirm the borrowing power. Defects in authority are among the few points that can unsettle a security later, so lender and borrower share an interest in getting them right. Our guide to company law in Bangladesh covers board and shareholder approvals.

Security: mortgages, hypothecation and charge registration

Security is where the bank loan laws Bangladesh lenders rely on reach furthest into a borrower's assets. Three formalities decide whether a security holds.

Registered mortgages over land

Section 59 of the Transfer of Property Act requires a mortgage securing Tk 100 or more, other than a mortgage by deposit of title deeds, to be made by a registered instrument signed by the mortgagor and attested by two witnesses. A proviso extends the same requirement to a mortgage by deposit of title deeds where the mortgagee is a scheduled bank or financial institution.[13] An equitable mortgage created by simply handing over deeds is therefore not enough for a bank loan; the instrument must be registered. Before mortgaging land, borrowers should run the checks in our guide to land ownership verification.

Power of sale and sale before suit

Banks routinely take an irrevocable power of attorney to sell mortgaged property. Under the Artha Rin Adalat Ain, a lender holding a mortgage or hypothecation with a power of sale must first try to sell the collateral before suing, and a borrower can rely on that rule if the bank skips it. The procedure and the borrower's remedies are set out in our Artha Rin Adalat guide and are not repeated here.

Registering a company's charge

Section 159 of the Companies Act 1994 requires a company's charge over immovable property, book debts, movables other than stock-in-trade, uncalled capital or a floating charge to be filed with the Registrar within 21 days of creation. An unregistered charge is void against the liquidator and any creditor, although the obligation to repay is unaffected and the money secured becomes immediately payable.[14] Registration gives notice of the charge to anyone who later acquires the property.[14]

Getting the security back

Once the mortgage money is paid, section 60 entitles the mortgagor to require the mortgagee to return the mortgage deed and all title documents, to deliver possession if the mortgagee holds it, and to retransfer the property or execute a registered acknowledgment that the mortgagee's interest is extinguished.[13] Borrowers should diarise the release on final repayment and obtain the deeds, the redemption instrument and an RJSC satisfaction filing for any company charge. Our property registration guide covers the registry steps.

Guarantees and the 2026 uniform personal guarantee form

Almost every corporate facility is backed by personal guarantees from directors or sponsors. In 2026 the rules on what those guarantees say changed materially.

The Contract Act baseline

Guarantees are where the bank loan laws Bangladesh courts apply draw most heavily on the general law. A contract of guarantee is a promise to discharge the liability of a third person on default. The surety's liability is co-extensive with the principal debtor's unless the contract provides otherwise.[12] A continuing guarantee may be revoked as to future transactions by notice; any variance in the loan terms without the surety's consent discharges the surety for later transactions; a composition, extension of time or promise not to sue the debtor discharges the surety unless the surety assents; and a creditor who loses or releases security without consent discharges the surety to the value of that security.[12]

What the uniform form requires

BRPD-1 Circular No. 01, issued on 4 January 2026 under section 45, directs all scheduled banks to use a single personal guarantee form in Bangla and English, and provides that the Bangla version prevails in case of inconsistency.[9] Under the form the personal guarantee is irrevocable and unconditional. The guarantor must pay within seven working days of the bank's first demand, without raising any question or referring to the principal debtor, and is liable for late payment fees and charges until payment.[9] The guarantee is a continuing security that survives partial payment and any merger or acquisition of the bank.[9]

Order of recovery and the guarantor's protections

The personal guarantee form allows the bank to implead the guarantor in any suit against the principal debtor, with a decree enforceable jointly and severally. But it also provides that the court should, so far as possible, proceed first against the principal debtor's assets, then the third-party mortgagor's property and only then the guarantor's.[9] It must be returned to the guarantor on full and final repayment, can be terminated by written agreement with the bank, and cannot be varied by reference to any other document without a written instrument signed by both.[9]

Consent is now the battleground

Clause 6 of the form preserves the guarantee where the bank grants more time, concessions or changed terms "if prior consent has been taken from me".[9] That tracks sections 133 and 135 of the Contract Act, which discharge a surety only where variation or time is given without consent.[12]

The practical consequence is that every rescheduling letter, renewal and limit enhancement a bank sends to a guarantor for signature is a consent that keeps the personal guarantee alive. A guarantor who wants to exit should revoke the continuing guarantee for future transactions in writing and refuse consents it does not intend to give. Bank guarantees issued for a customer are a different instrument, discussed in our guide to bank guarantees in Bangladesh.

Loan classification and provisioning: the 90-day rule

Of all the bank loan laws Bangladesh borrowers face, classification has the sharpest consequences. It decides when a borrower becomes a defaulter, what interest it can be charged and whether it can borrow anywhere else. The current rules are in Bangladesh Bank's master circular on loan classification, BRPD Circular No. 15 of 27 November 2024, in force since 1 April 2025.[2] We found no 2026 circular relaxing the overdue periods it set.

When a payment becomes overdue

The master circular sorts every facility into four types: continuous loans such as cash credit and overdrafts, demand loans such as post-import finance and forced loans, fixed term loans, and short-term agricultural credit. A loan is overdue from the day after its expiry or due date; for a term loan, each unpaid instalment is overdue from the day after it falls due.[2] Overdue status then drives the entire loan into a category.

The classification ladder

For all categories of loan, the whole loan is classified by the period overdue: Standard-0 with nothing overdue; Standard-1 at one day to one month; Standard-2 at one to two months; Special Mention Account at two to three months; Substandard at three to six months; Doubtful at six to twelve months; and Bad/Loss at twelve months or more.[2] Substandard, Doubtful and Bad/Loss loans are non-performing.[2] The longer separate periods that once applied to cottage, micro, small and medium enterprise loans no longer appear; the same ladder applies to every borrower.

Qualitative downgrades

A bank may classify a loan that is fully up to date. The circular requires banks to apply qualitative judgment alongside the overdue test and to adopt whichever result is worse.[2] Indicators include declining profitability, cash flow below debt service, weak or hostile management, doubts about ownership, significant pending litigation and an absence of faith in the financial statements; evidence of fraud or money laundering points to Bad/Loss.[2] Each classification must be justified in writing and signed by the officer assigning it and the reviewer, and the classification status of every loan is reported to the CIB.[2]

What classification does to the account

Once a loan is Substandard or Doubtful, accrued interest goes to an interest suspense account rather than income; once it is Bad/Loss, charging of interest on the account must cease.[2] Any recovery is applied first to interest, charged and uncharged, and only then to principal. Penal interest, where charged, follows the cap in force for the overdue period.[4][2] For the defaulter consequences under the Bank Company Act, the circular cross-refers to the statutory definition in section 5(GaGa) and section 27KaKa(3).[2] A borrower paying down a classified loan should therefore negotiate how payments are appropriated before paying.

Moving back up the ladder

A loan classified on the overdue test can be upgraded only by paying the overdue amount as agreed. A loan classified on qualitative judgment can be upgraded with documented improvement; moving from Bad/Loss to Doubtful, or Doubtful to Substandard, needs the managing director's decision, and from Substandard to unclassified needs the board.[2] A loan classified by Bangladesh Bank's inspectors on qualitative grounds cannot be declassified without their consent, and their view prevails in any disagreement with the bank.[2]

Renewing overdrafts and cash credit in 2026

Continuous loans must be renewed or fully adjusted within their tenure, and the master circular does not allow a classified loan to be declassified without payment of the overdue portion.[2] BRPD-1 Circular No. 05 of 3 March 2026 eased this. Banks must start renewal at least two months before expiry; if renewal still cannot be completed for reasons beyond control, an overdue continuous loan may be renewed before it becomes non-performing, with the reasons recorded. Any excess over the limit must be adjusted and cannot be split off into a new loan. The relief runs to 31 December 2027.[6]

Provisioning and why it shapes the bank's behaviour

Banks must provide 1 per cent for standard loans, 5 per cent for Special Mention Accounts, and 20, 50 and 100 per cent of the provisioning base for Substandard, Doubtful and Bad/Loss loans.[2] Only 50 per cent of the market value of mortgaged land and buildings counts as eligible collateral, and for most collateral the base can never fall below 15 per cent of the outstanding.[2] Each slide down the ladder costs the bank capital. That is why banks push hardest for regularisation at the Special Mention stage, which is also the borrower's best moment to negotiate.

Expected credit loss from 2028

On 8 March 2026 Bangladesh Bank issued its guidance on IFRS 9. Expected credit loss provisioning will apply to funded and non-funded credit facilities by January 2028 and to other financial instruments by January 2029.[7] Under an expected loss model, banks provision for deterioration before a payment is missed, so borrowers should expect closer monitoring of covenants and financial information well before any default.

Rescheduling, restructuring and default

When repayment fails, the borrower's options are regularisation, rescheduling under Bangladesh Bank's current policy, a one-time exit, or litigation. The 2025 and 2026 rescheduling and exit windows, down payments and CIB consequences are analysed in detail in our guide to loan defaulters in Bangladesh, and are not repeated here. Three borrower-side points apply under any scheme.

• Treat the interest suspense account as negotiable: unrealised interest on rescheduled loans is held in suspense, not income.[2]
• Bring the guarantors in: rescheduling a loan without a guarantor's consent risks discharging the guarantor under section 135 of the Contract Act, so banks will ask for written consents.[12]
• Deal with pending cases: any rescheduling agreement should state what happens to suits, execution cases and the CIB entry.

Banks owned or controlled by the borrower's group face an extra constraint: interest owed by connected persons cannot be waived without Bangladesh Bank's prior approval.[1]

Recovery and the borrower's position in court

Recovery under the bank loan laws Bangladesh courts apply is channelled into the Artha Rin Adalat, and section 27KaKa also requires a bank to bring a case against a defaulting borrower under the prevailing law.[1] The procedure, the pre-suit sale, mediation, execution and appeal deposits are covered in our Artha Rin Adalat guide. Mediation as a route to settlement is discussed in our guide to alternative dispute resolution in Bangladesh.

What matters at the documentation stage is that the borrower's later defences are built from the file. The sanction letter's rate terms, the date each instalment fell due, the penal interest cap in force at the time, the appropriation of payments and the guarantor's consents all become evidence. A borrower who keeps a complete set of signed documents and statements is in a far stronger position than one relying on the bank's file. Where a guarantee is called during a dispute over an underlying contract, our guide to bank guarantee encashment explains the injunction routes.

A borrower's sequence from term sheet to final release

The bank loan laws Bangladesh borrowers face reward preparation. The sequence below is the one we follow when advising a borrower or guarantor on a new or renewed facility.

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Mistakes borrowers make, and how to avoid them

• Signing a variable-rate sanction letter without caps: the circular requires the number and size of annual increases to be stated; insist on both.[3]
• Accepting old penal rates: since 13 May 2026 the penal interest cap is 0.5 per cent, and on a term loan it applies only to the overdue instalment.[4]
• Letting an overdraft lapse: start renewal two months before expiry and keep evidence that it was started.[6]
• Ignoring the Special Mention stage: at two months overdue the loan is one month from classification and CIB consequences.[2]
• Treating a personal guarantee as a formality: the uniform form requires payment within seven working days of first demand.[9]
• Leaving company charges unregistered: an unfiled charge is void against a liquidator, and the secured money becomes immediately payable.[14]
• Not collecting the deeds on repayment: enforce the section 60 right to the documents and a reconveyance.[13]

Not every facility falls within the domestic bank loan laws Bangladesh banks administer. Cross-border borrowing from a foreign lender or parent follows a different approval regime under foreign exchange rules, covered in our guide to foreign loan approval in Bangladesh. Prudential regulation from the bank's side, including capital and governance, is set out in our analysis of banking regulations in Bangladesh.

What to watch in bank loan laws Bangladesh for the rest of 2026

Four developments will shape borrowing over the next year. First, the Bank Company (Amendment) draft, including the proposed lock on directors of borrowing companies, still has to clear Bangladesh Bank review and Cabinet.[11] Second, the 4 per cent spread ceiling will show whether lending rates follow deposit rates down.[5] Third, the relaxed single borrower limits run on fixed timetables to 2027 and 2028, after which large groups will need to refinance or syndicate.[8] Fourth, banks preparing for expected credit loss accounting from January 2028 will tighten monitoring and covenants.[7]

The best protection under the bank loan laws Bangladesh lenders use is a well-negotiated file at the start. TRW advises borrowers, sponsors and guarantors on sanction letters, facility and security documents, personal guarantees, renewals, rescheduling and recovery disputes. Explore our banking and finance practice and our banking and finance litigation team, or contact TRW to review a facility before you sign.

Frequently asked questions

Which law governs bank loans in Bangladesh?

The Bank Company Act 1991 and the directions Bangladesh Bank issues under it, together with the Contract Act 1872 for the loan and guarantees, the Transfer of Property Act 1882 for mortgages and the Companies Act 1994 for company charges.[1] [12] [13] [14]

Is there still an interest rate cap on bank loans?

No general cap. Since 8 May 2024 rates are market-based: banks declare sector rates and price borrowers within one percentage point of them. Credit cards are capped at 25 per cent, and since June 2026 most banks' average spread must stay within 4 per cent.[3] [5] [10]

How much penal interest can a bank charge?

A maximum of 0.5 per cent from 13 May 2026, on the whole outstanding of a continuous or demand loan, or on the overdue instalment of a term loan.[4]

When does a bank loan become classified?

When it is three months or more overdue it becomes Substandard; six months, Doubtful; twelve months, Bad/Loss. A bank may also classify a loan earlier on qualitative grounds.[2]

Can a bank raise the rate on my variable-rate loan whenever it likes?

No. The sanction letter must state the maximum number of increases in a year and the maximum percentage of each, and no service charge may exceed the declared rate.[3]

Can I challenge a loan in court because the interest is too high?

Not on that ground alone. Section 30 of the Bank Company Act bars courts from hearing a case only because the interest charged was excessive. Arithmetic errors and breaches of circulars can still be disputed.[1]

What is the uniform personal guarantee form?

A standard Bangla and English form that all banks must use from 4 January 2026. The guarantor pays within seven working days of first demand, and the Bangla text prevails.[9]

Is a guarantor released if the loan is rescheduled?

Under sections 133 and 135 of the Contract Act a surety is discharged by variation or extension of time given without consent. The uniform form keeps the guarantee alive where prior consent was obtained.[9] [12]

Does a bank mortgage over land have to be registered?

Yes. Section 59 of the Transfer of Property Act requires registration, and its proviso extends this to a mortgage by deposit of title deeds in favour of a scheduled bank.[13]

Can a defaulting borrower get a new bank loan?

No. Section 27KaKa(3) bars banks and financial institutions from extending credit to a defaulting borrower, subject to a narrow exception for related group members with Bangladesh Bank's prior approval.[1]