Country's commercial banks can now receive repayment cheques against disbursed loans from their clients by maintaining three procedures, under revised rules.

The central bank revised its prudential guidelines for consumer financing and small-enterprise financing by adding a new regulation related to procedures of loan repayment.

Firstly, the banks will have to take authority for debiting money from their clients' accounts as per loan agreement.

Under the second procedural condition, a memorandum of deposit of cheque (MDC) has to be taken from the clients concerned.

Lastly, fully prepared and valid signed postdated cheques have to be taken for each installment by stipulating amount and date as per repayment schedule.

The Bangladesh Bank (BB) has already issued a notification to this effect, asking the chief executive officers (CEOs) and managing directors (MDs) of all scheduled banks to incorporate the new regulation into loan agreements with the clients.

"We've included the new regulation in our guidelines to avoid legal complexity for making repayment against disbursed loans by cheque," a BB senior official told the FE Sunday.

He also said the central bank took the latest measures to protect the interests of both banks and borrowers.

The central bank earlier had imposed a bar on the banks from receiving blank cheques as security from their clients against loan or investment to check fraud and forgery.

Besides, the CEOs and MDs of the banks had been asked not to entertain Non-Magnetic Ink Character Recognition (MICR) cheque as security.

"There is no scope to receive blank cheques as security against disbursed loans," the central banker said while replying to a query.

The BB has issued the new regulation in line with the existing negotiable instrument act.