Regulatory Alerts2012-09-23
Added · Updated
BRPD Circular No. 14: 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—using objective criteria based on overdue periods and qualitative judgments regarding borrower deficiencies. Specific provisioning rates are mandated at 20% for Sub-standard, 50% for Doubtful, and 100% for Bad/Loss loans, alongside general provisions ranging from 0.25% to 5% for unclassified exposures and Special Mention Accounts. Banks are required to conduct classification activities quarterly, maintain written justifications for all classifications, and adhere to strict rules for calculating provision bases based on eligible collateral values.
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