BRPD Circular Letter No. 48: Determination of risk weight against investments in different forms of Alternative Investment

Subject: BRPD Circular Letter No. 48 Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka. 29 September, 2020 BRPD Circular Letter No.- 48 Date: ----------------- 14 Ashwin, 1427 ME 23, 2019 Managing Director/Chief Executive All Scheduled Banks operating in Bangladesh. Dear Sir,

Regarding the determination of Risk Weight (RW) against investments in various sectors covered under the Alternative Investment Policy.

With reference to the above subject, we draw your attention to the "Guidelines on Risk Weighting of Assets" (Basel II RW Guidelines) issued vide BRPD Circular No.-18, dated: 21 December, 2014.

2. In Paragraph 7 of the aforementioned Guidelines: Risk Weighting and Capital Adequacy Ratio - Annex-1, instructions were given to impose a 150% Risk Weight (RW) against investments in Non-Banking Financial Institutions (NBFI). Now, in the interest of the expansion of the Alternative Investment sector in Bangladesh, a risk weight of 100% has been determined against investments in all sectors covered under the Alternative Investment Policy (including Private Equity, Impact Fund, etc.) along with NBFI.

3. This instruction will take immediate effect and remain valid until 30 September, 2022.

4. This instruction is issued under the powers conferred by Section 45 of the Companies Act, 1991.

Yours faithfully, (Md. Nazrul Islam) Deputy General Manager Phone: 9530252