Regulatory Alerts2024-11-27
Added
BRPD Circular No. 15: 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 Credit—and seven risk tiers ranging from Standard-0 to Bad/Loss based on objective past-due periods and qualitative judgments. Banks are required to maintain specific provisioning rates, including a 1% general provision for standard loans and specific provisions of 20%, 50%, and 100% for Sub-Standard, Doubtful, and Bad/Loss loans respectively, calculated against defined eligible collateral bases. The directive mandates quarterly classification activities, strict reporting via forms CL-1 to CL-5 to the Enterprise Data Warehouse, and adherence to these rules by Islamic banks for their investments. These instructions supersede previous circulars and become effective on 01 April 2025.