BRPD Circular No. 08: Loan Classification and Provisioning

Website: www.bb.org.bd Banking Regulation & Policy Department Bangladesh Bank Head Office Dhaka

August 02, 2015 BRPD Circular No. 08 Date: ------------------------------ Shraban 18, 1422

Chief Executives All Scheduled Banks in Bangladesh

Dear Sir, Loan Classification and Provisioning

Please refer to the BRPD Circular No.14 of 2012, 19 of 2012, 05 of 2013 & 16 of 2014 dated September 23, 2012 , December 27, 2012 , M ay 29, 2013 & November 18, 2014 respectively and attached CL formats on the captioned subject. For the purpose of meticulous compliance with the Banking Companies Act, 1991 (amended up to 2013) along with the view to strengthening banking supervision, few changes have been brought in the CL formats. Revised formats are attached herewith. The Enterprise Data Warehouse (EDW) template (T_PS_Q_LN_PROV) for loan classification and provisioning has been changed and uploaded on the Bangladesh Bank website accordingly. Banks are advised to report according to the amended CL formats along with the changed EDW template from September, 2015 quarter. All other instructions of the above circulars will remain unchanged.

Yours sincerely, (Chowdhury Md. Feroz Bin Alam) General Manager Phone-9530252 Enclo: 06 (Six)

CL-1 BRANCH SUMMARY OF LOAN CLASSIFICATION AND PROVISION AS OF……………….. Ref : BRPD Circular no. 14/2012, 19/2012, 05/2013, 16/2014, 08/2015 Bank Name: Branch Name : Stamp of Branch Serial No……… (As Provided by Bangladesh Bank) (AMOUNT IN TAKA) SL. No. Categories of Loans Total Balance outstanding Base for provision Amount of Provision required Amount of actual Provision Interest suspense on Unclassified(UC) Classified Defaulted SMA SS DF B/L UC (standard) (if any) SMA Classified A/Cs Total Standard SMA SS DF B/L 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1 Continuous Loan (CL-2) I) Small & Medium Enterprise Financing (SMEF) II) Consumer Financing (CF) III) Loans to BHs/MBs/SDs IV) Other than SMEF, CF, BHs/ MBs,/SDs Sub-total of I, II, III & IV 2 Demand Loan (CL-3) I) Small & Medium Enterprise Financing (SMEF) II) Consumer Financing (CF) III) Loans to BHs/MBs/SDs IV) Other than SMEF, CF, BHs/ MBs,/SDs Sub-total of I, II, III & IV 3 Fixed Term loan (CL-4) I) Small & Medium Enterprise Financing (SMEF) II) Consumer Financing (Other than HF & LP) III) Housing Finance (HF) IV) Loans for professionals to set up business (LP) V) Loans to BHs/MBs/SDs VI) Others than SMEF, CF, HF, LP, BHs/ MBs,/SDs Sub-total of I, II, III, IV, V & VI 4 Short term Agri. Credit and Microcredit (CL-5) I) Short Term Agri. Credit II) Microcredit Sub-total of I & II Sub-total (1+2+3+4) Staff Loan Grand Total Off-Balance Sheet Exposure CHECK LIST Rate of Provision : Form No. No. of Page (s) Form No. No. of Page (s) Particulars Short Term Agri. Credit Consumer financing SMEF Loans to BHs/MBs/ SDs All other Credit CL-2 CL-4 Other than HF,LP HF LP CL-3 CL-5 UC Standard 2.5% 5% 2% 2% 0.25% 2% 1% SMA - 5% 2% 2% 0.25% 2% 1% NB: CF=CONSUMER FINANCING, HF=HOUSING FINANCE, LP=LOANS FOR PROFESSIONALS TO SET UP BUSINESS, SMA=SPECIAL MENTION ACCOUNT, SS=SUBSTANDARD, DF=DOUBTFUL, B/L=BAD/LOSS, BHs/ MBs,/SDs= LOANS TO BROKERAGE HOUSES/MERCHANT BANKS/STOCK DEALERS. DEFAULTED=AS PER 5(GaGa) OF THE BANKING COMPANIES ACT, 1991. Classified SS 5% 20% 20% 20% 20% 20% 20% DF 5% 50% 50% 50% 50% 50% 50% B/L 100% 100% 100% 100% 100% 100% 100%

Ref : BRPD Circular no. 14/2012, 19/2012, 05/2013, 16/2014, 08/2015 CL-2 RETURNS FOR CLASSIFICATION OF CONTINUOUS LOANS AS OF……………….. Page No. Bank Name: Branch Name : Stamp of Branch Serial No……… (As Provided by Bangladesh Bank) (Amount in Taka) Sl. No. Name of borrower and NID Nature of Loans and Advances Loan Identification No. Date of sanction & last renewal [RNL(1/2/../n)] & last rescheduling [RSDL (1/2/../n)] (if any) DD/MM/YY Amount sanctioned, renewed, rescheduled (if any) Balance Outstanding as of reference date Date of Expiry DD/MM/YY Period of arrears (in months) (Ref. Date-Col. 8) Preliminary status of Classification Final Classification Objective Criteria Qualitative Judgement Classification Status Basis for Classification 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Sl. No. Amount Cumulative interest suspense as of reference date Value of eligible collateral (to nearest amount) Base for Provision for Remarks Unclassified (UC) Classified Defaulted outstanding Standard SMA Sub￾standard (SS) Doubtful (DF) Bad/Loss (B/L) UC (Standard) (If any) SMA Classified A/Cs Total SMA Col. (15-21) Sub-standard (SS) Col. (16-22-24) Doubtful (DF) Col. (17-22-24) Bad/Loss (B/L) Col. (18-22-24) 1 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Total

Ref : BRPD Circular no. 14/2012, 19/2012, 05/2013, 16/2014, 08/2015 CL-3 RETURNS FOR CLASSIFICATION OF DEMAND LOANS AS OF……………….. Page No. Bank Name: Branch Name : Stamp of Branch Serial No……… (As Provided by Bangladesh Bank) (Amount in Taka) Sl. No. Name of borrower and NID Nature of Loans and Advances Loan Identification No. Date of sanction & last rescheduling [RSDL (1/2/../n)] (if any) DD/MM/YY Amount Disbursed, rescheduled (if any) Balance Outstanding as of reference date Claim date DD/MM/YY Period of arrears (in months) (Ref. Date –Col.8) Preliminary status of Classification Final Classification Objective Criteria Qualitative Judgement Classification Status Basis for Classification 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Sl. No. Amount Cumulative interest suspense as of reference date Value of eligible collateral (to nearest amount) Base for Provision for Remarks Unclassified (UC) Classified Defaulted outstanding Standard SMA Sub￾standard (SS) Doubtful (DF) Bad/Loss (B/L) UC (Standard) (If any) SMA Classified A/Cs Total SMA Col. (15-21) Sub-standard (SS) Col. (16-22-24) Doubtful (DF) Col. (17-22-24) Bad/Loss (B/L) Col. (18-22-24) 1 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Total

Ref : BRPD Circular no. 14/2012, 19/2012, 05/2013, 16/2014, 08/2015 CL-4 RETURNS FOR CLASSIFICATION OF FIXED TERM LOANS AS OF……………….. Page No. Bank Name: Branch Name : Stamp of Branch Serial No……… (As Provided by Bangladesh Bank) (Amount in Taka) Sl. No. Name of borrower and NID Nature of facilities Loan Identification No. Date of sanction and last rescheduling [RSDL (1/2/../n)] DD/MM/YY Principal Amount, Rescheduled Amount Balance Outstanding as of reference date Installment Date of first Repayment due Repayment due (Ref. date – col.10)+col.9 (in months) Amount paid since sanctioning /Last rescheduling Time equivalent of amount paid (in months) Period of Arrears (in months) (col.11- col.13) Preliminary status of Classification Final Classification Size Frequency Objective Criteria Qualitative Judgement Classif￾ication Status Basis for Classif￾ication 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Total Sl. No. Amount Cumulative interest suspense as of reference date Value of eligible collateral (to nearest amount) Base for Provision for Remarks Unclassified (UC) Classified Defaulted outstanding Standard SMA Sub￾standard (SS) Doubtful (DF) Bad/Loss (B/L) UC (Standard) (If any) SMA Classified A/Cs Total SMA Col. (20-26) Sub-standard (SS) Col. (21-27-29) Doubtful (DF) Col. (22-27-29) Bad/Loss (B/L) Col. (23-27-29) 1 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Total Note : Col. 9 = Installment Frequency in months Col. 13 = ( Col. 12 X Col.9) ÷ Col.8

Ref : BRPD Circular no. 14/2012, 19/2012, 05/2013, 16/2014, 08/2015 CL-5 RETURNS FOR CLASSIFICATION OF SHORT TERM AGRICULTURAL CREDIT AND MICRO CREDIT AS OF……………….. Page No. Bank Name: Branch Name : Stamp of Branch Serial No……… (As Provided by Bangladesh Bank) I. Short Term Agri. Credit II. Microcredit (Amount in Taka) Sl. No. Loan Identification No. and NID Date of sanction & last rescheduling [RSDL (1/2/../n)] DD/MM/YY Principal Amount, Rescheduled Amount Due date DD/MM/YY Period of arrears (in months) (Ref. Date – Col.5) Balance Outstanding Interest suspense Value of eligible collateral (to nearest amount) Base for provision for Unclassified Classified Defaulted Substandard (SS) Col. (8-13-15) Doubtful (DF) Col. (9-13-15) Bad/Loss (B/L) Col. (10-13-15) Sub￾standard (SS) Doubtful (DF) Bad/Loss (B/L) UC (if any) Classified A/Cs Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Total

CL-1 OBU SUMMARY OF LOAN CLASSIFICATION AND PROVISION AS OF……………….. Ref : BRPD Circular no. 14/2012, 19/2012, 05/2013, 16/2014, 08/2015 Bank Name: Branch Name : Stamp of Branch Serial No……… (As Provided by Bangladesh Bank) (AMOUNT IN TAKA) SL. No. Categories of Loans Total Balance outstanding Base for provision Amount of Provision required Amount of actual Provision Interest suspense on Unclassified(UC) Classified Defaulted SMA SS DF B/L UC (standar d) (if any) SMA Classified A/Cs Total Standard SMA SS DF B/L 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1 Continuous Loan (CL-2) I) Small & Medium Enterprise Financing (SMEF) II) Consumer Financing (CF) III) Loans to BHs/MBs/SDs IV) Other than SMEF, CF, BHs/ MBs,/SDs Sub-total of I, II, III & IV 2 Demand Loan (CL-3) I) Small & Medium Enterprise Financing (SMEF) II) Consumer Financing (CF) III) Loans to BHs/MBs/SDs IV) Other than SMEF, CF, BHs/ MBs,/SDs Sub-total of I, II, III & IV 3 Fixed Term loan (CL-4) I) Small & Medium Enterprise Financing (SMEF) II) Consumer Financing (Other than HF & LP) III) Housing Finance (HF) IV) Loans for professionals to set up business (LP) V) Loans to BHs/MBs/SDs VI) Others than SMEF, CF, HF, LP, BHs/ MBs,/SDs Sub-total of I, II, III, IV, V & VI 4 Short term Agri. Credit and Microcredit (CL-5) I) Short Term Agri. Credit II) Microcredit Sub-total of I & II Sub-total (1+2+3+4) Staff Loan Grand Total Off-Balance Sheet Exposure CHECK LIST Rate of Provision : Form No. No. of Page (s) Form No. No. of Page (s) Particulars Short Term Agri. Credit Consumer financing SMEF Loans to BHs/MBs/ SDs All other Credit CL-2 CL-4 Other than HF,LP HF LP CL-3 CL-5 UC Standard 2.5% 5% 2% 2% 0.25% 2% 1% SMA - 5% 2% 2% 0.25% 2% 1% NB: CF=CONSUMER FINANCING, HF=HOUSING FINANCE, LP=LOANS FOR PROFESSIONALS TO SET UP BUSINESS, SMA=SPECIAL MENTION ACCOUNT, SS=SUBSTANDARD, DF=DOUBTFUL, B/L=BAD/LOSS, BHs/ MBs,/SDs= LOANS TO BROKERAGE HOUSES/MERCHANT BANKS/STOCK DEALERS. DEFAULTED=AS PER 5(GaGa) OF THE BANKING COMPANIES ACT, 1991. Classified SS 5% 20% 20% 20% 20% 20% 20% DF 5% 50% 50% 50% 50% 50% 50% B/L 100% 100% 100% 100% 100% 100% 100%