Region

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2009-03-03

Added 2026-08-13 · Updated 2026-08-22

DOS Circular No. 01: Procedure of Imposing of Penal Interest and Rate thereof due to Failure in Maintaining Cash Reserve (CRR) by the Scheduled Banks

The document consolidates previous directives and establishes that penal interest at the Bank Rate plus 5% applies to any daily shortfall in the 4.5% Cash Reserve Ratio (CRR) requirement. It further mandates a daily penal interest charge for bi-weekly average CRR shortfalls below 5%, with potential enforcement actions under Section 36(5) of the Bangladesh Bank Order, 1972, if the shortfall persists into the third fortnight. These rules are effective from March 1, 2009, and explicitly repeal DOS Circulars No. 02/2005 and No. 06/2005.

Bangladesh

Bangladesh Bank

Bangladesh Bank Head Office Department of Off-Site Supervision Web: www.bangladeshbank.org.bd www.bangladesh-bank.org P.O. Box 325 Dhaka.

19 Falgun, 1415 DOS Circular No.-01 Date: ---------------- 3 March, 2009

Chief Executive All Banking Companies Operating in Bangladesh.

Dear Sir,

Regarding the Procedure of Imposing Penal Interest and Rate thereof due to Failure in Maintaining Cash Reserve (CRR) by Banks

Reference is drawn to your attention to the DOS Circulars No.-02/2005 and 06/2005 previously issued regarding the imposition and collection of penal interest for failure by Scheduled Banks to maintain Cash Reserve (CRR) under Sections 36(4) and 36(5) of the Bangladesh Bank Order, 1972.

In the meantime, having re-determined the daily minimum Cash Reserve amount to 4.5% via BRPDI Circular No.-01/2009, all instructions contained in the previously issued circulars regarding the imposition, collection procedure, and rate of penal interest for failure to maintain Cash Reserve (CRR) have been consolidated. Accordingly, penal interest shall now be imposed and collected at the following rates and procedures:

If on any day of the month the Cash Reserve amount is less than 4.5% of total Demand and Time Liabilities, penal interest at the Bank Rate + 5% rate shall be imposed for that day on the shortfall.
For failure to maintain an average daily Cash Reserve of 5% on a bi-weekly basis, penal interest for 1 day at the Bank Rate + 5% rate shall be imposed on the amount under-reserved.
If any Scheduled Bank fails to maintain an average of 5% in any bi-weekly period, and does not maintain 5% Cash Reserve as total Demand and Time Liabilities on the first day of the subsequent bi-weekly period, the CRR shortfall shall be considered to have continued into the 3rd week, and appropriate action shall be taken by Bangladesh Bank under Section 36(5) of the Bangladesh Bank Order, 1972.

These instructions shall be effective from 1 March, 2009, and DOS Circular No.-02/2005 and DOS Circular No.-06/2005 previously issued are hereby repealed.

Please acknowledge receipt.

Yours faithfully, Signature/- (S. K. Sur Chowdhury) General Manager Phone: 7120376