DOS Circular No. 02: Regarding Advance-Deposit Ratio (ADR)/Investment-Deposit Ratio (IDR) — BB — BD

Bangladesh Bank
Circular No.: DOS-02
Chief Executive Officer
P.O. Box No. 325
Dhaka.
Department of Off-Site Supervision
DOS Circular No.-02 Date: ---------------------

To:
All Chief Executives
All Scheduled Banks operating in Bangladesh.

Dear Sir,

Regarding Advance-Deposit Ratio (ADR)/Investment-Deposit Ratio (IDR).

Reference is drawn to your attention to DOS Circular No.-01 dated January 30, 2018, on the subject matter above.

Until further instructions are issued in this circular, the maximum Advance-Deposit Ratio (ADR) for banks under the conventional system is set at 83.50 percent (80.50 percent + an additional 3.0 percent based on the bank's decision considering sub-indicators of financial indicators) and the maximum Investment-Deposit Ratio (IDR) for Islamic Shariah-based banks and the Islamic banking programs of conventional banks is set at 89.0 percent (88.0 percent + an additional 1.0 percent based on the bank's decision considering sub-indicators of financial indicators). Instructions were previously given to banks whose Advance-Deposit Ratio (ADR)/Investment-Deposit Ratio (IDR) exceeded the limits mentioned in this circular to mandatorily reduce them to the prescribed levels by June 30, 2018.
In partial modification of these instructions, the compliance deadline has been rescheduled from June 30, 2018, to December 31, 2018. In this regard, if investment products provided by banks to customers favorably between January 30, 2018, or before, are converted into loans within the specified time frame (i.e., by December 31, 2018), and as a result, there is a temporary increase in the reduction of the Advance-Deposit Ratio (ADR)/Investment-Deposit Ratio (IDR) mentioned in paragraph 02, this matter will not be considered a violation of the circular's instructions. However, even in such cases, it must be ensured that the Advance-Deposit Ratio (ADR)/Investment-Deposit Ratio (IDR) is brought down to the prescribed limits by December 31, 2018.
This instruction shall come into force immediately.

Yours faithfully,

Signed/-
(Nurunnahar)
General Manager
Phone: 9530093
8 Falgun, 1424 Bangabda
20 February, 2018 AD