Mapping of External Credit Assessment Institutions' rating scales with Bangladesh Bank rating Grade

Website: www.bangladesh-bank.org www.bb.org.bd Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka October 25 , 2010 BRPD Circular No. 31 Date:---------------------------- Kartik 10 , 1417 Chief Executives All Scheduled Banks in Bangladesh Dear Sir, Mapping of External Credit Assessment Institutions’ (ECAIs) rating scales with Bangladesh Bank (BB) rating Grade Please refer to BRPD Circular No. 24 dated August 03, 2010 regarding the issuance of Guidelines on Risk Based Capital Adequacy (RBCA) for banks. According to the guidelines, Risk Weighted Asset (RWA) against Credit Risk is to be computed on the basis of credit rating conducted by an External Credit Assessment Institutions (ECAIs) duly recognized by Bangladesh Bank (BB). Consequently, calculated RWA and Capital Adequacy Ratio (CAR) will be reported as per specific reporting formats enclosed in the RBCA guidelines.
2) From this point of view, National Credit Rating Ltd. (NCRL) and Emerging Credit Rating
Ltd. (ECRL) have been recognized as eligible ECAIs in addition to existing two rating agencies (i.e. CRISL and CRAB). All the scheduled banks operating in Bangladesh may nominate any one or more rating agency (ies) for their own and counterparty credit rating for the purpose of calculating RWA against credit risk as per RBCA guidelines.
3) The mapping of rating scales of CRISL and CRAB with BB rating grades has already been
specified in the Guidelines. Now, the rating scales of NCRL and ECRL have been mapped with BB rating grades as given below:
BB Rating Grade Equivalent Rating of
NCRL
Equivalent Rating of
ECRL
1 AAA AAA
2 AA+, AA AA+, AA, AA￾3 AA-, A+ A+, A
4 A, A- A-, BBB+, BBB, BBB-, BB+
5 BBB+, BBB BB, BB￾6 BBB-, BB+, BB, BB-, B+, B, B-, C+, C, C-, D B+, B, B-, C, D Short-Term Rating Category Mapping S1 N1 ECRL-1 S2 N2 ECRL-2 S3 N3 ECRL-3 S4 N4 ECRL-4 S5 N5 D S6 Please acknowledge receipt. Yours Sincerely, Sd/- (Md. Jahangir Alam) General Manager Phone: 7117825