Write a letter to a defaulting client for adjustment of overdue loan liability with consequences of non-repayment

MODEL LETTER TO DEFAULTING CLIENT

Date: [Date]

Mr./Ms. [Client Name]
[Business Name / Address]

Subject: Request for Adjustment of Overdue Loan Liability

Dear Mr./Ms. [Name],

We refer to your Loan Account No. [Loan Account Number] maintained with [Bank Name], [Branch Name].

According to our records, an outstanding amount of BDT [Amount] has remained overdue since [Date of Default]. Despite our previous reminders, the overdue liability has not yet been adjusted.

We value our long-standing relationship with you and understand that temporary business challenges may sometimes affect repayment. We therefore encourage you to settle the overdue amount or contact us immediately to discuss a suitable repayment arrangement.

Please note that failure to repay the overdue liability within [Number] days from the date of this letter may result in the following actions:

  1. Your loan account may be classified as a Non-Performing Loan (NPL) in accordance with Bangladesh Bank guidelines.
  2. Your credit information may be reported to the Credit Information Bureau (CIB), which could affect your eligibility for future loans from any financial institution.
  3. The bank may initiate legal action under the applicable laws to recover the outstanding amount, including the enforcement of securities provided against the loan.
  4. Additional interest, charges, and legal expenses may be added to your outstanding liability as permitted under the loan agreement and applicable regulations.

We strongly request you to contact your Relationship Manager at [Phone Number] or visit our branch as soon as possible to discuss a repayment plan or any restructuring option that may be available.

We sincerely hope you will take immediate steps to regularize your loan account. We remain committed to supporting you in resolving this matter in a mutually beneficial manner.

Yours faithfully,

[Your Name]
Senior Relationship Manager
[Bank Name], [Branch Name]

This platform aims at supporting bankers for JAIBB & AIBB Exam preparation. Read the contents regularly & don't forget to share with your colleagues.