Banks asked to develop recovery plans 

The Bangladesh Bank has asked all banks to develop plans for their recovery from any "severe stress events" which often threaten the financial and operational strength and viability of the lenders.

According to a circular issued on Thursday, the banks must submit their first "recovery plans" to the central bank by June 30 this year.

The financial regulator requested the managing directors of the banks to place the issue at their next board meetings for drafting the plans.

From 2023 onwards, lenders will have to submit their updated recovery plans by 31 January every year.

The central bank reserves the right to adjust these requirements to the circumstances of each bank, and will review the recovery plan of banks as part of the regular ongoing supervisory process, the circular added.

The money market regulator also said the bank managements will reassess the recovery plans at least once annually, and in response to any material event that includes a wide range of transactions or restructures that could increase business value.

And they will take necessary steps to reassess the plans, to reflect significant changes in banks' size, risk profile, activities, and complexity, as well as changes in external threats, it added.

The boards will also be responsible for overseeing banks' recovery planning process, reviewing and approving the recovery plans at least once annually, and will address significant changes made by the management, said the circular.

Banks have to submit their recovery plans in line with a format by the central bank.