Regulatory Alerts2022-12-22
Added
BRPD Circular Letter No. 53: Transfer of interest to income account and maintaining provision against loans
The Bangladesh Bank mandates that interest on subsidized loans accrued in 2022 be transferred to income accounts following a risk assessment, while prohibiting such transfers for rescheduled, restructured, or one-time exit facility loans unless paid in cash. Banks are required to maintain an additional 2% general provision against these loans (1% for SMEs), which must be held in a specific suspense account until further instructions. If these loans are fully repaid in cash or reclassified as impaired requiring specific provisions, banks may transfer the previously held additional general provisions to appropriate accounts at their discretion.
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