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Banks must provide information on large loans with new exposure limits


Bangladesh Bank has required all banks to submit information on their large loans from April in line with new exposure limits set at the start of the year.

Information for each month must be submitted to the central bank by the 10th of the following month, according to a circular issued Wednesday.

For submitting information on large loans, all previous guidelines have been rescinded and new guidelines will come into effect from April, he added.

A form has been attached to the circular to provide information according to the new reference framework for major credits.

Hard and soft copies should be sent with loan details in accordance with guidelines from external credit risk rating systems and minutes of board meetings.

On January 16, the central bank lowered exposure limits for single borrowers and large loans.

For funded and unfunded loans, currently a bank can lend up to a maximum of 35% of its total capital to a single customer. This limit has been increased to 25%.

On the other hand, for the large loans, six slaps were fixed according to the ratio of the classified loan.

The first slap in the face is that if a bank has a 3% ranked loan ratio, the big loan can receive 50% of its total loan and advances. Previously, it was 5% and 56%, respectively.

The final slap is that if a bank has a ranked loan ratio above 20%, the big loan can be awarded 30% of their total loan.

However, the exposure limit for large loans does not exceed 400% of a bank’s total capital.