Regulatory Alerts2020-07-21
Added · Updated
BRPD Circular No. 16: Loan Classification and Provisioning for Cottage, Micro and Small Credits under CMSME
Banks in Bangladesh must classify and maintain provisions for Cottage, Micro, and Small credits under CMSME based on specific overdue periods. Loans past due for six to less than eighteen months are classified as Sub-standard, those for eighteen to less than thirty months as Doubtful, and those for thirty months or beyond as Bad/Loss. Corresponding provisioning requirements are set at 5% for Sub-standard, 20% for Doubtful, and 100% for Bad/Loss credits, with a 0.25% provision for all unclassified credits. This directive supersedes previous circulars on this subject and takes immediate effect.
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