Regulatory Alerts2012-06-14
Added · Updated
BRPD Circular No. 07: Master Circular on Loan Classification and Provisioning
All scheduled banks in Bangladesh must classify loans into four categories—Continuous, Demand, Fixed Term, and Short-term Agricultural & Micro-Credit—based on objective overdue periods and qualitative judgments. The circular mandates specific provisioning rates, including 20% for Sub-standard, 50% for Doubtful, and 100% for Bad/Loss loans, alongside general provisions for unclassified accounts. Banks are required to conduct classification activities quarterly, maintain written justifications for each loan, and adhere to defined rules for eligible collateral valuation when calculating provision bases.