Dhaka, Bangladesh (BBN) – The revised instruction on loan classification and provisioning will be effective from July 01, 2012 instead of June 14 this year, the central bank said on Tuesday.
The banks will have to report loan classification and market required provisions in terms of the revised instructions from the third quarter of calendar year 2012, the Bangladesh Bank (BB) said in a clarification on Master Circular: Loan Classification and Provisioning, issued earlier.
“Shortfall if any in provisioning as of September 30, 2012 according to new classification will have to be met in full by end December, 2012,” the BB noted.
Earlier on June14, the central bank has tightened its loan classification, provisioning and rescheduling policies aiming 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 six months fixed earlier. 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-19June12-4:47 pm (BST)