BRPD Circular No. 16: Mapping of External Credit Assessment Institutions Rating Scales with Bangladesh Bank Rating Grade

Website: www.bb.org.bd
Banking Regulation and Policy Department
Bangladesh Bank
Head Office
Dhaka
October 29, 2012
BRPD Circular No-16 Date:---------------------- Karttik 14, 1419 Chief Executives All Scheduled Banks in Bangladesh Dear Sir, Mapping of External Credit Assessment Institutions’ (ECAIs) Rating scales with Bangladesh Bank (BB) Rating Grade Please refer to BRPD Circular No. 35 dated December 29, 2010 regarding the issuance of Guidelines on Risk Based Capital Adequacy (RBCA) for banks. According to the guidelines, Risk Weighted Asset (RWA) against Credit Risk is to be computed on the basis of credit rating conducted by External Credit Assessment Institutions (ECAIs) duly recognized by Bangladesh Bank (BB). Consequently, calculated RWA and Capital Adequacy Ratio (CAR) will be reported as per specific reporting formats enclosed in the RBCA guidelines.
2) From this point of view, Waso Credit Rating Company (BD) Limited has been recognized
as an eligible ECAI in addition to existing 06 (Six) rating agencies (i.e. CRISL, CRAB, NCRL, ECRL, ACRSL and Alpha Credit Rating Limited-ACRL). All the scheduled banks operating in Bangladesh may nominate any one or more rating agency (ies) for their own and counterparty credit rating for the purpose of calculating RWA against credit risk as per RBCA Guidelines.
3) Rating scales of CRISL, CRAB, NCRL, ECRL, ACRSL and ACRL with BB rating grades
has already been mapped earlier. Now, the rating scales of WASO have been mapped with BB rating grades as given below:
Please acknowledge receipt.
Yours Sincerely,

(K. M. Abdul Wadood )
General Manager
Phone: 7117825

Long Term Short Term
BB’s Rating
Grade
Equivalent Notch/Notation of WASO BB’s Rating
Grade
Equivalent Notch/Notation of
WASO
1 AAA S1 P-1
AA1, AA2, AA3
2 A1, A2, A3 S2 P- 2
3 BBB1, BBB2, BBB3 S3 P- 3
4 BB1, BB2, BB3 S4 P- 4
5 B1, B2, B3,CCC S5 P-5
6* CC1,CC2,CC3,C+, C, C-, D S6 P-6

• Includes Default Rating (DR)