Dhaka, Bangladesh (BBN) – The Bangladesh Association of Banks (BAB) has discussed the impact of the central bank’s latest instructions regarding loan classification, provisioning and rescheduling on the banking sector.
The discussion took place at its city office Tuesday with its Chairman Nazrul Islam Mazumdar in the chair.
“The central bank’s latest instructions on loan classification, provisioning and rescheduling will hit the profitability of the banks, and will also create a negative impact on the government’s revenue earnings,” a senior banker said.
The Bangladesh Bank (BB) earlier tightened its loan classification, provisioning and rescheduling policies to ensure stability in the country’s banking sector.
Under the revised provisions, a continuous loan will be classified for non-repayment within three months, instead of the previously-fixed six months. The base for provisioning has been fixed at minimum 20 per cent of the outstanding balance of the loan, while rescheduling will be limited to three times.
BBN/SSR/AD-12Sept12-7:40 am (BST)
