Regulatory Alerts2021-12-19
Added
DFIM Circular Letter No. 33: Regarding Loan Classification, Transfer of Interest/Profit to Income Account and Maintaining Provision Against Loans/Investments
The document replaces previous instructions regarding the classification of loans, leases, and investments as of December 31, 2021, and the transfer of accrued interest or profit to income accounts. Financial institutions must classify such facilities normally if at least 25% of due installments from January 1, 2021, to December 31, 2021, are paid by the end of December 2021, provided the remaining balance is paid within one year of maturity; otherwise, standard classification rules apply. Institutions are required to maintain an additional 2% special provision on these facilities, which cannot be transferred to income or adjusted without prior Bangladesh Bank approval. The directive applies exclusively to accounts finalized as of December 31, 2021, and supersedes Circular Letter No. 28 dated September 1, 2021, while other instructions therein remain unchanged.