Regulatory Alerts2011-11-16
Added · Updated
Mapping of External Credit Assessment Institutions' rating scales with Bangladesh Bank rating grade
ARGUS Credit Rating Services Limited is recognized as an eligible External Credit Assessment Institution in addition to four existing agencies. Scheduled banks may nominate any recognized agency for calculating Risk Weighted Assets against credit risk under the Risk Based Capital Adequacy Guidelines. The circular specifies the mapping of ARGUS rating scales to Bangladesh Bank rating grades for both long-term and short-term ratings.
Website: www.bangladesh-bank.org www.bangladeshbank.org.bd www.bb.org.bd Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka November 16, 2011 BRPD Circular No-09 Date:--------------------------- Agrahayan 02, 1418 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. 35 dated December 29, 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 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, ARGUS Credit Rating Services Limited (ACRSL) has been recognized as an eligible ECAI in addition to existing 04 (Four) rating agencies (i.e. CRISL, CRAB, NCRL and ECRL). 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, CRAB, NCRL and ECRL with BB rating grades has already been specified in the Guidelines. Now, the rating scales of ARGUS have been mapped with BB rating grades as given below: Please acknowledge receipt. Yours Sincerely, (K. M. Abdul Wadood) General Manager Phone: 7117825
Long Term Short Term BB’s Rating Grade Equivalent Notch/Notation of ACRSL BB’s Rating Grade Equivalent Notch/Notation of ACRSL 1 AAA S1 ST-1 AA+, AA, AA2 A+, A, A- S2 ST 2 3 BBB+, BBB, BBB- S3 ST 3 4 BB+, BB, BB- S4 ST 4 5 B+, B, B-,CC+,CC,CC- S5 ST-5 6* C+, C, C-, D S6 ST-6
- Includes Default Rating (DR)