Secured Transactions in Bangladesh: Movable Collateral, Syndication, Receivables and Securitisation (2026)

Secured transactions Bangladesh law in 2026: one system, several layers

Secured transactions Bangladesh lenders rely on no longer rest only on land. The Transfer of Property Act 1882 still governs mortgages, the Contract Act 1872 still governs pledge and lien, and the Companies Act 1994 still voids an unregistered company charge. Since 1 August 2024, however, the Secured Transactions (Movable Property) Act 2023 has added a registry-based regime for movable collateral, receivables and leases, while BSEC rules govern asset-backed securities issued through trust SPVs.

This guide explains how those layers fit together: the movable property regime in depth, priority and enforcement, syndicated lending, assignment of receivables, securitisation and SPV structures, and the 2026 status of the Artha Rin Adalat reforms. Drafting of individual mortgage, hypothecation and guarantee documents, stamp duty and the RJSC filing workflow are covered in our companion guide to loan security documentation in Bangladesh.

Summary: Bangladesh has two parallel systems for security over movables: the traditional instruments of hypothecation, pledge, lien and company charges registered at the RJSC, and the Secured Transactions (Movable Property) Act 2023, which creates a security interest by written agreement and perfects it by possession, control or an electronic financing statement, with priority by order of registration. Receivables are assigned under section 130 of the Transfer of Property Act, asset-backed securities are issued through Trust Act SPVs under BSEC rules, and enforcement still runs mainly through section 12 of the Artha Rin Adalat Ain 2003.

Key point: The 2023 Act is in force but its machinery is not yet routine. Section 9 requires the Government to establish a Registration Authority by gazette notification, and as late as July 2026 commentators still described the asset registry as envisioned rather than operating. Until it is, a corporate lender's protection against a liquidator remains the 21-day RJSC filing under section 159 of the Companies Act.

At a glance

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Table of Contents

How secured transactions Bangladesh law is built in 2026

There is no single code. The rules are spread across statutes written over 140 years, each with its own creation, perfection and enforcement requirements, and getting one layer right does not cure a failure in another. Most enforcement disputes begin with a perfection gap rather than a drafting error.

For land, a mortgage securing Tk 100 or more must be made by a registered instrument attested by two witnesses, and since the proviso added to section 59 of the Transfer of Property Act a mortgage by deposit of title deeds in favour of the Government, a scheduled bank or a financial institution must also be registered.[2] For goods, a pledge is a bailment as security, and on default the pawnee may sue and retain the goods or sell them after reasonable notice.[3] Bankers have a general lien over goods bailed to them unless the contract excludes it.[3]

Hypothecation has no statutory definition, but the Artha Rin Adalat Ain treats hypothecated movables with a power of sale like mortgaged land for pre-suit sale.[5]

Over all of this sits section 159 of the Companies Act 1994. A company charge securing debentures, on uncalled capital, on immovable property, on book debts, on movables other than stock-in-trade, or a floating charge, is void against the liquidator and any creditor unless its particulars and instrument are filed with the Registrar within twenty-one days of creation.[4] The table below compares the main instruments; on a phone, scroll it sideways.

Our guide to bank loan laws in Bangladesh explains how these instruments sit within sanction letters, classification and Bangladesh Bank rules.

The Secured Transactions (Movable Property) Act 2023

The Act is Act No. 49 of 2023, dated 13 November 2023. Commencement was left to notification, and SRO No. 277-Law/2024 of 31 July 2024 brought it into force on 1 August 2024.[1] "Government" means the Financial Institutions Division, which holds the rule-making power, and the Bangla text prevails over any authentic English translation.[1]

Scope and exclusions

Section 3(1) applies the Act to financial institutions as defined in the Artha Rin Adalat Ain, insurers, microcredit institutions, money-lenders and any other person who lends on movable collateral under another law. Section 4 makes it additional to other laws, so hypothecation, pledge and section 159 filings continue alongside it.[1] It does not apply to wages, salary and other remuneration for personal services (professional fees excepted), to intermediated securities, to goods regulated or registered under the Chattogram, Mongla and Payra port laws, the Civil Aviation Authority Act 2017 and the Merchant Shipping Ordinance 1983, or to property exempt from attachment.[1] Ships and aircraft therefore sit outside the regime.

The sixteen classes of eligible collateral

Only property listed in the Schedule can be encumbered under the Act.[1] The list includes export raw materials, fixed deposit receipts, certified precious metals, share certificates, intellectual property, livestock, fish, standing crops, furniture, electronic goods, software and apps capable of valuation, registered vehicles, preserved agricultural products, leases of more than one year, insurance and annuity rights, and the transfer of accounts even where no obligation is secured.[1] The Government may amend the Schedule by notification.

A functional definition of security interest

The Act looks at substance, not labels. A security interest is any interest in movable property or a fixture that secures payment or performance, and it expressly includes the interest of a transferee of an account.[1] The definition of grantor reaches a hire-purchase buyer, a lessee under a finance lease of more than one year and a buyer under a retention-of-title sale.[1] Lessors, conditional sellers and receivables buyers who have never seen themselves as secured lenders need to consider registration.

Section 6 adds collateral conditions: the debtor or grantor must own the asset or have power to transfer it, it must have a market value, and it must have enough economic life to outlast the security. Valuation is left to regulations, and section 8 contemplates that the lender registers the financing statement before sanctioning the loan.[1]

Creating and perfecting a security interest over movable property

The 2023 Act separates attachment, which binds the parties, from perfection, which binds everyone else. Under section 17(2) a security interest is ineffective against third parties unless created and perfected as the Act requires.[1]

The written security agreement

A security interest arises when value is given, the grantor has rights in the collateral, and the grantor signs a security agreement identifying it. The agreement must be in writing, identify the parties and describe the secured obligation and collateral, and it may secure present or future, fixed or fluctuating obligations.[1] Section 17(3) overrides the Contract Act: possession by the secured party does not replace a written agreement, so a pledge by delivery alone is not a security agreement under this Act.[1]

Perfection and the RJSC link

Section 20 provides two methods: possession or control by the secured party or its agent, or registration of a financing statement under section 12.[1] For companies, charge information registered with the RJSC under section 159 is to be exchanged through an interoperable system and then treated as registered under the 2023 Act.[1]

Filing the financing statement

The statement must give the grantor's and secured party's addresses and national identity numbers (registration or trade licence numbers for institutions), a description sufficient to identify the collateral and the loan details; for serial-numbered goods such as vehicles and machinery, the value, serial number, brand and manufacturer.[1] Filing is electronic, and registration takes effect from the date and time it becomes searchable. It may be made after the security agreement is signed, and one registration may cover several agreements.[1]

Errors are contained. A wrong serial number defeats the filing only against a buyer or lessee of that item, serial numbers are not needed for inventory, and an error in one grantor's identifier invalidates the filing only as to that grantor.[1] The creditor must send each grantor the registration certificate within 30 days, although failure does not invalidate the filing.[1]

Search, evidence and discharge

Records are indexed by the grantor's national identity number, the collateral serial number or other prescribed criteria, and certified printouts are admissible in evidence.[1] Section 14(2), however, opens the stored data for reading only to lenders, grantors, debtors, creditors and secured parties, which sits uneasily with a fully public search; the regulations will need to resolve it. After repayment the registration is cancelled and archived for at least ten years, and the debtor may apply if the secured party fails to act.[1]

Priority, proceeds and insolvency

Priority is where the 2023 Act departs most clearly from the older law, which left competing claims over movables to notice, possession and the order of RJSC filings. Section 23 now sets a statutory ladder.[1]

• Registered against registered: order of registration.
• Registered against unperfected: the registered interest wins.
• Possession or control against registration: wins only if perfected before the competing financing statement was registered.
• Two unperfected interests: order of creation.

A transferee of a security interest takes the transferor's priority, and because registration can precede the loan, a lender that files early locks in its place.[1] The interest continues automatically into proceeds, and stays perfected where the statement covers them or they are cash, cheques or deposit accounts; where the original collateral was perfected by possession or control, proceeds must be perfected within 30 days.[1]

A registered judgment-creditor notice caps the secured party's priority at advances made before it learnt of the decree, plus preservation costs. A lien for goods or services supplied in the ordinary course of business ranks ahead up to their reasonable value, and the debtor cannot sell collateral without consent unless ordinary-course sales are agreed.[1]

The decisive rule is section 25(2). An unperfected security interest is ineffective against a receiver under the Bankruptcy Act 1997 if unperfected at adjudication, against a liquidator under the Companies Act if unperfected when the High Court Division made the winding-up order, and against a buyer for value without knowledge.[1] That mirrors section 159 and confirms the rule running through all secured transactions Bangladesh law: an unperfected lender is an unsecured lender when it matters.

Is the movable collateral registry working?

The legal architecture is complete; the institution is not yet visible. Section 9 obliges the Government to establish, by gazette notification, a statutory Registration Authority with a chief executive it appoints, and sections 30 and 31 leave the detail to rules and regulations.[1] As at 20 October 2026 we have not located a published notification establishing the Authority or rules under section 30. In July 2026 a commentary in The Business Standard observed that the Act will matter only when the envisioned asset registry becomes part of ordinary credit work.[14] For secured transactions Bangladesh lenders document today, the 2023 Act is the direction of travel rather than a working filing system.

In the meantime, file every registrable company charge at the RJSC within 21 days, since that is both the current protection and the data that will migrate.[4] For individuals and firms, perfect by possession or control where possible: hold the FDR, the precious metal or the share certificate, or control the collection account. Draft security agreements to satisfy sections 17 and 18 now, and diarise registration of finance leases, retention-of-title sales and receivables purchases once filing opens.

Enforcement: Artha Rin section 12 and the 2023 Act

Enforcement of secured transactions Bangladesh lenders hold runs through two statutes that point at each other. The 2023 Act preserves the remedies in the security agreement and expressly includes the rights given by the Artha Rin Adalat Ain 2003, leaving seizure, disposal, surplus and redemption rules to be prescribed.[1] Section 28 adds a consensual route: on default, the lender and debtor may agree that the lender takes possession of encumbered property, including receivables or bank balances, without going to court, and sells it or keeps it in satisfaction of the debt.[1] Without consent at that point, section 27(3) sends the parties to court.

Section 12 of the Artha Rin Adalat Ain

For banks the real self-help tool is section 12. A financial institution holding pledged or liened property with a right of sale must sell it and adjust the proceeds before suing; one holding a mortgage or hypothecation with a power of sale must sell, or try and fail to sell, before filing.[5] The sale follows the section 33 auction procedure so far as possible, and the District Magistrate can recover possession for the institution or the buyer.[5]

If the step is skipped, the court deducts the collateral's declared or assessed value from the decree. A section 12 sale gives the buyer title that cannot be questioned, leaving the borrower a damages claim for irregularity.[5] The remedy belongs only to a "financial institution" as defined in section 2, which covers Bangladesh Bank, bank companies and listed state-owned lenders.[5] Borrower defences are covered in our guide on how to defend a bank suit in Bangladesh.

The 2026 amendment: where it stands

Bangladesh Bank drafted a replacement Artha Rin Adalat Ordinance in 2025. In January 2026 the law ministry turned it down and asked the Financial Institutions Division for targeted amendments, to be prepared by a nine-member committee including the Law Commission, Bangladesh Bank and banks.[8] As at 20 October 2026 no Artha Rin amending Act appears among the Acts of 2026 on the official laws portal, so section 12 operates in its 2004 and 2010 form.[7] See our guides to the Artha Rin Adalat and the loan defaulter regime.

Outside that system, the Commercial Courts Act 2026 covers disputes arising from ordinary transactions of traders, bankers and financial institutions, including the interpretation of commercial documents, but excludes matters within the Artha Rin courts' jurisdiction.[6] Claims by lenders that are not financial institutions, intercreditor disputes and receivables purchase disputes are natural candidates.

Secured lending and loan syndication

Exposure limits and project size push Bangladeshi banks into syndicates, often alongside offshore lenders and development finance institutions. The security package must then work for a group whose members have different enforcement tools.

Security trustees in secured transactions Bangladesh syndicates

Agency and trust are recognised under the Contract Act 1872 and the Trusts Act 1882, and a security agent or trustee commonly holds security for a syndicate, so parallel debt is not needed.[12] The 2023 Act fits this: a "secured party" includes a person holding a security interest for another and a trustee whose trust deed includes it.[1] Register the RJSC charge and any financing statement in the trustee's name and record each lender's share in the trust deed.

Offshore lenders are not financial institutions under the Artha Rin Adalat Ain, so they typically appoint a local scheduled bank as security agent or trustee to enforce without prior court intervention; no separate Bangladesh Bank approval is needed for the bank to act.[12] Security or guarantees in favour of a non-resident need prior Bangladesh Bank permission under section 13 of the Foreign Exchange Regulation Act 1947.[12] Approval of the debt itself is covered in our guide to foreign loans.

The intercreditor agreement

The intercreditor agreement fixes ranking, security management, voting on waivers and acceleration, who instructs enforcement and how proceeds are shared.[12] Contractual subordination is enforceable under the Contract Act but cannot override the statutory order of payment in insolvency.[12] In a mixed syndicate it must also stop Taka lenders running a section 12 sale ahead of offshore lenders, and address the trustee bank's conflict between its own exposure and its duty to the group. Loan transfers should move the debt while the security stays with the trustee. Direct agreements and step-in are covered in our guide to project finance in Bangladesh.

Assignment of receivables

Receivables are the collateral most Bangladeshi businesses actually have: export proceeds, contract payments, rentals and tariff payments. They can be assigned outright or by way of security, but the Transfer of Property Act imposes formalities that are easy to miss.

Actionable claims

Section 3 defines an actionable claim as a claim to any debt, other than one secured by mortgage of immovable property or by hypothecation or pledge of movables, or to a beneficial interest in movables not in the claimant's possession, whether existent, accruing, conditional or contingent.[2] Unsecured trade debts fall squarely within it. A debt already secured by mortgage, hypothecation or pledge does not, so its transfer must follow the rules for the underlying security.

Section 130: writing, then notice

The transfer must be made by a written instrument signed by the transferor. It is complete on execution, the transferor's rights vest in the transferee whether or not notice is given, and the transferee may sue in its own name.[2] But until the debtor is a party or has received express notice, every dealing between the debtor and the transferor, including payment, is valid against the transferee.[2] Section 131 requires the notice to be written, signed by the transferor (or the transferee if the transferor refuses) and to state the transferee's name and address. Under section 132 the transferee takes subject to all equities at the date of transfer, including set-off.[2]

Registration

An assignment of contractual rights is commonly regarded as needing no regulatory registration.[12] Two exceptions catch many deals. A company charge on book debts is registrable under section 159(1)(d), so a security assignment by a company must be filed within 21 days.[4] And because the 2023 Act treats a transferee of an account as holding a security interest, outright receivables purchases will need a financing statement once the registry operates.[1] In practice, check anti-assignment and consent clauses (public counterparties often require consent), obtain debtor acknowledgments waiving set-off, and redirect payment into a collection account charged to the lender.

Securitisation and asset-backed securities

Securitisation turns a pool of cash-generating assets into tradeable securities repaid from the pool rather than the originator's balance sheet. BSEC regulates it under two instruments that operate together.

The Asset Backed Securities Issue Rules 2004

The Securities and Exchange Commission (Asset Backed Securities Issue) Rules 2004 were made under section 24(1) of the Securities and Exchange Commission Act 1993, gazetted on 16 October 2004 and amended in 2006.[9] They remain on BSEC's list of rules in force; we found no replacement. Eligible assets include credit card receivables, lease rentals, franchises, licences, healthcare receivables and other cash flows the Commission accepts.[9] No one may issue asset-backed securities, or act as their trustee, without BSEC registration, and publicly offered securities must be listed within three months.[9]

The trustee must have at least Tk 1 crore paid-up capital and Tk 80 lakh net worth, no material connection with the issuer or originator, no director in loan default, and a compliance officer.[9] It holds the trust assets for investors, reviews the issuer's monthly reports and forwards them to BSEC, and must call holders' meetings before any winding-up, early redemption or amendment of a scheme. BSEC may replace it on the application of two-thirds of holders.[9]

The Debt Securities Rules 2021 and the 2026 amendment

The BSEC (Debt Securities) Rules 2021, notified on 31 March 2021, apply to debt securities and sukuk and to asset-backed securities offered to the public. ABS applicants must also comply with the 2004 Rules, and the originator is defined as a person who securitises its assets through a special purpose vehicle.[10] After consent the deed of trust must be registered under the Registration Act 1908 and published online until maturity, and a trustee registered under these Rules needs Tk 10 crore paid-up capital.[10] A BSEC notification of 7 April 2026, gazetted on 5 May 2026, redefined green and social bonds to include a compliant asset-backed security, giving sustainable ABS an express label.[11]

Distressed assets: a draft law to watch

On 25 June 2026 the Financial Institutions Division published a draft Distressed Asset Management Act 2026 for consultation. It proposes a regulator under Bangladesh Bank's oversight, licensed companies that buy bad loans for cash and may hold them in separate trusts, loan servicer companies, and sale of mortgaged property without a court order.[13] It remains a draft; no such Act appears among the Acts of 2026.[7] If enacted, it would create the first real market for securitising non-performing loans.

SPV structures in Bangladesh

A special purpose vehicle isolates assets and cash flows from the sponsor's other risks. Bangladeshi practice uses two forms, usually dictated by the regulatory route.

The trust SPV. For ABS and sukuk the SPV is a trust formed under the Trust Act 1882.[10] The originator transfers the pool to the trust, the BSEC-registered trustee holds it for investors, and a servicer, often the originator, collects. The company SPV. Project finance and joint ventures use a company under the Companies Act 1994 as borrower and asset-holder, with a constitution confined to the project, limits on further borrowing, a share pledge for lenders and every charge filed at the RJSC within 21 days.[4]

Bangladesh has no securitisation statute with a true-sale safe harbour, and we have found no reported decision recharacterising a receivables sale as a secured loan. Isolation therefore depends on the general law: a section 130 transfer, notice to debtors and release of any existing floating charge over the pool.[2] Once the registry operates, a financing statement against the originator will also be needed.[1] Our overview of securities law in Bangladesh covers the wider BSEC framework.

Step-by-step: building an enforceable security package

The sequence below reflects how we close secured transactions Bangladesh lenders and borrowers sign, from term sheet to post-closing filings.

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Critical mistakes in secured transactions Bangladesh deals

• Missing the 21-day RJSC filing: the charge is void against the liquidator and creditors.[4]
• Relying on delivery alone: the 2023 Act requires a written agreement even when the lender holds the collateral.[1]
• Assigning debts without notice: the debtor's payment to the assignor discharges it.[2]
• Appointing an offshore security agent: it cannot use section 12, so enforcement drops into the courts.[5]
• Skipping the section 12 sale: the court deducts the collateral's value from the decree anyway.[5]

What to watch for the rest of 2026

Four developments will shape secured transactions Bangladesh lenders and investors close next year: the Registration Authority and rules under the 2023 Act; the targeted Artha Rin amendments being prepared through the Financial Institutions Division;[8] the draft Distressed Asset Management Act;[13] and the bedding-in of the Commercial Courts for finance disputes outside the Artha Rin system.[6] Security packages signed today should comply with section 159 and section 12 now, with agreements and collateral descriptions that will register cleanly under the 2023 Act.

TRW advises lenders, borrowers, trustees and originators through our banking and finance practice and capital markets practice, and acts in enforcement through our banking and finance litigation practice. To review a security package, contact TRW.

Frequently asked questions

Is the Secured Transactions (Movable Property) Act 2023 in force?

Yes. Act No. 49 of 2023 came into force on 1 August 2024 under SRO No. 277-Law/2024, but the Registration Authority and rules are still needed before electronic filing becomes routine.[1]

What movable assets can be used as loan collateral in Bangladesh?

The Schedule lists sixteen classes, including FDRs, certified precious metals, share certificates, intellectual property, livestock and crops, furniture and electronics, software, registered vehicles, export raw materials, long leases, insurance proceeds and transfers of accounts.[1]

How is priority decided between two lenders over the same movables?

Under section 23, interests perfected by registration rank in order of registration and beat unperfected interests; possession or control wins only if it came first.[1]

Do company charges still need to be filed with the RJSC?

Yes. Section 159 still requires filing within 21 days, failing which the charge is void against the liquidator and creditors. The 2023 Act shares RJSC data with its registry; it does not replace the filing.[1] [4]

Can a bank sell collateral without going to court?

Yes. Section 12 of the Artha Rin Adalat Ain 2003 requires a financial institution with a power of sale to sell, or try to sell, the collateral before suing, and gives the buyer good title.[5]

Has the Artha Rin Adalat Ain been amended in 2026?

Not as at 20 October 2026. A replacement ordinance was turned down in January 2026 in favour of targeted amendments, and no amending Act appears among the Acts of 2026.[7] [8]

Does an assignment of receivables need notice to the debtor?

The assignment is complete on signing a written instrument, but until the debtor receives express written notice its payments to the assignor are valid against the assignee.[2]

Who can act as security trustee for a syndicated loan?

Agency and trust are both recognised. Foreign lenders usually appoint a local scheduled bank so that the section 12 sale is available, and no separate Bangladesh Bank approval is needed for it to act.[12]

Which rules govern asset-backed securities in Bangladesh?

The BSEC Asset Backed Securities Issue Rules 2004, still in force, and for public issues the BSEC (Debt Securities) Rules 2021 as amended in 2026.[9] [10] [11]

What form must an SPV take for securitisation?

For BSEC-regulated ABS and sukuk, a trust formed under the Trust Act 1882, with a BSEC-registered trustee and a deed of trust registered under the Registration Act 1908.[10]