Regulatory Alerts2014-11-18
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BRPD Circular No. 16: Loan Classification and Provisioning
BRPD Circular No. 16 amends Section 4(c) of the September 23, 2012 circular regarding provisioning for short-term agricultural and micro-credits. The updated rules require scheduled banks in Bangladesh to set aside 2.5% for all unclassified credits, 5% for credits classified as 'Sub-standard' and 'Doubtful', and 100% for those classified as 'Bad/Loss'. These amendments apply to all scheduled banks in Bangladesh and take effect immediately.
Website: www.bb.org.bd Banking Regulation & Policy Department Bangladesh Bank Head Office Dhaka
November 18, 2014 BRPD Circular No. 16 Date: ------------------------- Agrahayan 04, 1421
Chief Executives All Scheduled Banks in Bangladesh
Dear Sir,
Loan Classification and Provisioning
Please refer to BRPD Circular No. 14, dated September 23, 2012 on the captioned subject. With a view to encouraging participation of the banks in disbursing agricultural and micro-credits, the above circular has been reviewed and following amendments have been made: Section 4(c) of the aforesaid circular will be replaced as under: “(c) Provision for Short-term Agricultural and Micro-Credits: (1) All unclassified Credits (irregular and regular) : 2.5% (2) Classified as ‘Sub-standard’ and ‘Doubtful’ : 5% (3) Classified as ‘Bad/Loss’ : 100%.’’
This circular shall be effective immediately. Yours sincerely, (Chowdhury Md. Feroz Bin Alam) General Manager Phone-9530252
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