BRPD Circular Letter No. 05: Guidelines on Risk Based Capital Adequacy - Revised Regulatory Capital Framework

Banking Regulation & Policy Department Website: www.bb.org.bd Bangladesh Bank Head Office Dhaka 31 May, 2016 BRPD Circular Letter No. - 05 Date: ------------------------ 17 Jaishtha, 1423 Managing Director/Chief Executive All scheduled banks operating in Bangladesh Dear Sir, Regarding amendment of Guidelines on Risk Based Capital Adequacy – Revised Regulatory Capital Framework for Banks in Line with Basel-III Please refer to the BRPD Circular No. 18, dated December 21, 2014. As per section 3.1.3 of "Guidelines on Risk Based Capital Adequacy - Revised Regulatory Capital Framework for banks in line with Basel–III", general provision/general loan-loss reserve eligible for inclusion in Tier 2 capital is limited to a maximum 1.25% of credit risk-weighted assets. Henceforth, the entire general provision maintained against unclassified loans and advances as per regulations will be considered as capital under Tier-2. As such, Footnote No. 08 on page-08 (general provision/general loan-loss reserve eligible for inclusion in Tier 2 will be limited to a maximum 1.25 percentage points of credit risk-weighted assets calculated under the standardized approach) of the said guidelines is superseded by this circular. This instruction will come into force with immediate effect. Yours sincerely, (Abu Farah Md. Nasser) General Manager Phone: 9530252