Banks must provide large loans info with new exposure limits
The central bank reduced the single borrower and large loan exposure limits on 16 January
The Bangladesh Bank has asked all banks to submit information on their large loans from this April as per the new exposure limits fixed at the beginning 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 on Wednesday.
For the submission of large loan information, all the previous directives have been cancelled and new directives will be effective from April, it added.
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A form has been attached to the circular for providing information as per the new benchmark of large loans.
Hard and soft copies should be sent along with the loan details as per the external credit risk rating systems guidelines and the minutes of board meetings.
The central bank reduced the single borrower and large loan exposure limits on 16 January.
For both funded and non-funded loans, at present, a bank can lend up to a maximum of 35% of its total capital to a single customer. This limit has been changed to 25%.
On the other hand, for the large loans, six slaps have been fixed according to the ratio of the classified loan.
The first slap is, if a bank has a classified loan ratio of 3%, the large loan can be given 50% of its total loan and advances. Earlier, it was 5% and 56%, respectively.
The last slap is if a bank has a classified loan ratio over 20%, the large loan can be given 30% of its total loan.
However, the large loan exposure limit does not exceed 400% of a bank's total capital.
