Regulatory Alerts2023-05-24
Added
DOS Circular No. 01: Provision against investment in listed and non-listed share, bond/debenture and mutual fund
Bangladesh Bank mandates scheduled banks to maintain specific provisions against investments in listed and non-listed shares, bonds, debentures, and mutual funds, effective June 30, 2023. For listed securities, banks must provision for the difference between purchase price and market value if the latter is lower, calculated separately every six months. For non-listed equity, provisions are required for capital reduction or lack of net worth, while non-performing non-listed bonds and debentures require escalating provisions of 25% in the first year, an additional 25% in the second, and 100% if unpaid for three consecutive years. Banks must submit quarterly provision data to the Department of Off-Site Supervision by the 15th of the following month, and previous DOS Circular Letters No. 03 and 10 are hereby cancelled.