Dhaka, Bangladesh (BBN)– The central bank of Bangladesh has allowed one more credit rating agency – ARGUS Credit Rating Services Limited (ACRSL) – as an External Credit Assessment Institution (ECAI) to assess credit risks in line with the Basel-II framework.
“The central bank has recognized the ACRSL as an eligible ECAI to meet additional demand for credit rating of the bank clients as well as to improve competition among the credit rating agencies,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
Currently, four credit rating agencies – Credit Rating Information and Services Limited (CRISL), Credit Rating Agency of Bangladesh (CRAB), National Credit Rating Limited (NCRL) and Emerging Credit Rating Limited (ECRL) – are now operating in Bangladesh.
The mapping of new rating agency with the central bank rating grade has already been set to calculate the risk weighted assets (RWA), the BB official said adding that the central bank has issued a circular in this connection.
“All the scheduled banks operating in Bangladesh may nominate any or both the rating agency or agencies for their own and counterparty credit rating for the purpose of calculating RWA against credit risk as per guidelines on Risk Based Capital Adequacy (RBCA) for banks,” the central bank said in its circular.
The central banker also said the central bank will calculate the RWA on the basis of reports of five rating agencies.
The Basel-II accord came into force in Bangladesh from January 1, 2010 to consolidate capital base of the banks in line with the international standard.
BBN/SSR/AD=19Nov11-1:35 pm (BST)
