Regulatory Alerts2025-07-07
Added
DFIM Circular No. 03: Provisioning Against Investments in Share & Equity, Bond & Debenture, Mutual Fund & Commercial Paper
The Department of Financial Institutions and Markets (DFIM) of Bangladesh Bank mandates that finance companies establish institutional provisions against investments in listed and unlisted securities, mutual funds, and commercial paper. For listed securities, provisions are required if the market value falls below the purchase price. For unlisted equity, provisions apply if the net asset value is lower than the purchase price or if specific financial reporting and profitability conditions are not met. Additionally, non-convertible preference shares, bonds, and debentures require escalating provisions of 25%, 50%, and 100% if interest or dividends remain unpaid for one, two, or three accounting periods respectively, with specific classification rules for accrued interest.