Regulatory Alerts2009-10-14
Added · Updated
Guidelines on Subordinated Debt for inclusion in Regulatory Capital
Subordinated Debt replaces Perpetual Subordinated Debt as a component of Regulatory Capital (Tier 2 or Tier 3) for scheduled banks in Bangladesh. The guidelines establish specific criteria for qualification, including a minimum maturity of five years for Tier 2 and two years for Tier 3, along with caps limiting Tier 2 debt to 30% of Tier 1 capital and Tier 3 debt to 250% of Tier 1 capital. Prior approval from Bangladesh Bank is required for issuance and repayment, and reciprocal holdings are ineligible for capital treatment. The document also mandates specific disclosure, subordination clauses, and reserve requirements for these instruments.
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