Regulatory Alerts2022-01-16
Added
BRPD Circular No. 01: Single Borrower and Large Loan Exposure Limit
Bangladesh Bank's BRPD Circular No. 01, effective 01 April 2022, consolidates and amends instructions on single borrower and large loan exposure limits for all scheduled banks in Bangladesh. It mandates that the aggregate principal exposure to a single person or group must not exceed 25% of a bank's capital, with funded exposure capped at 15% of capital, applying specific conversion factors for non-funded exposures. Additionally, it establishes a large loan portfolio ceiling against a bank's total loans and advances, ranging from 30% to 50% based on the bank's classified loan percentage, while ensuring the aggregate large loan exposure does not surpass 400% of the bank's capital. Existing exposures that breach these limits must be brought into compliance by 31 December 2022, or by 31 December 2023 for power sector facilities, without increasing exposures to non-compliant counterparties during the rationalization period.