Regulatory Alerts2020-12-10
Added · Updated
BRPD Circular Letter No. 56: Loan Classification
The document mandates that banks classify loans and investments benefiting from installment payment moratoriums under BRPD Circular-17/2020 by transferring accrued interest to income accounts or suspending it, based on specific approval thresholds: management approval with audit committee recommendation for exposures of 10 crore BDT and above, Head Office approval for 5-10 crore BDT, and Branch Manager approval for below 5 crore BDT. Banks must also maintain specific and general provisions according to classification rules and create an additional 1% general provision for all non-classified loans as of December 31, 2020, labeled 'COVID-19 Additional Provision' in the balance sheet. These instructions are issued under Section 45 of the Companies Act, 1991, and take immediate effect.
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