Regulatory Alerts2017-09-27
Added · Updated
Loan Classification and Provisioning
Scheduled banks in Bangladesh are now required to maintain a 1% general provision against all unclassified Short-term Agricultural and Micro-Credits, replacing the previous 2.5% requirement. This change amends Section 4(c) of BRPD Circular No. 14, dated September 23, 2012, which also specifies provisions of 5% for 'Sub-standard' and 'Doubtful' classifications, and 100% for 'Bad/Loss' classifications. This circular comes into force with immediate effect.
website: www.bb.org.bd Banking Regulation & Policy Department Bangladesh Bank Head Office Dhaka-1000 27 September, 2017 BRPD Circular No- 15 Date : ------------------------ 12 Ashwin, 1424
Chief Executives All Scheduled Banks in Bangladesh Dear Sir, Loan Classification and Provisioning. Please refer to BRPD Circular No. 14, dated September 23, 2012 and BRPD Circular No. 16, dated November 18, 2014 on the captioned subject. As per above mentioned circular (BRPD Circular No-16/2014) banks are required to maintain 2.5% provision against all unclassified credits (irregular and regular) under Short-term Agricultural and Micro-Credits. With a view to encouraging participation of the banks in disbursing agricultural and micro-credits, it has been decided that banks will maintain 1% General Provision instead of 2.5% against all unclassified Short-term Agricultural and MicroCredits. Accordingly, Section 4(c) of the BRPD Circular No. 14, dated September 23, 2012 has been replaced as follows: ‘‘ Provision for Short-term Agricultural and Micro-Credits: (1) All unclassified Credits (irregular and regular) : 1% (2) Classified as ‘Sub-standard’ and ‘Doubtful’ : 5% (3) Classified as ‘Bad/Loss’ : 100%.’’ This circular will come into force with immediate effect. Yours sincerely, (Abu Farah Md. Nasser) General Manager Phone: 9530252
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