As per the Bank Company Act, 1991 amended from time to time lastly in 2013, Bangladesh Bank, the central bank of Bangladesh is responsible to set criteria for Loan Classification in Bangladesh and setting provision requirement against the respective classification. As per the latest Bangladesh Bank BRPD Circular 03/2019, Loan Classification in Bangladesh based on Objective criteria is presented below.
Type of Loan
|
Classification of Loan
Objective Criteria under BRPD cir 03/2019
|
Continuous Loan
|
Overdue: From the following day of expiry date
SMA : Overdue for
2 months or beyond but less than 3 months
SS : overdue for 3 months or beyond but less
than 9 months
DF: overdue for 9 months or beyond but less
than 12 months
BL: overdue for 12 months or beyond
|
Demand Loan
|
Overdue: From the following day of expiry date
SMA: overdue for 2 months or beyond but less
than 3 months
SS: overdue for 3 months or beyond but less
than 9 months
DF: overdue for 9 months or beyond but less
than 12 months
BL: overdue for 12 months or beyond
|
Term Loan
|
SMA: overdue installments are equal to or more than the
amount of installments due within 2 months.
SS: overdue installments are equal to or more than the
amount of installments due within 3 months.
DF: overdue installments are equal to or more than the
amount of installments due within 9 months.
BL: overdue installments are equal to or more than the
amount of installments due within 12 months.
Note: In case of any installment(s) or part of
installment(s) of a Fixed Term Loan is not repaid within the fixed expiry
date, the amount of unpaid installment(s) will be termed as ‘past due or
overdue installment’ after six months of the expiry date.
Remarks:
Since, overdue installments will be
counted after 6 months of expiry; SMA will be after 8 months, SS after 9
months, DF after 15 months, and BL after 18 months of expiry/due dates. Term
Loan below 10 lacs will also be fallen under these criteria.
|
Explanation on reporting of ‘defaulted’ loan in the format under
BRPD Circular 08/2015 [section 2.5 of BRPD circular 3/2019]: According
to Bank Company Act 1991; any person, business entity or company will be
treated as ‘default borrower’ if their own or associated loan(s) or part of
loan(s) or accrued interest/profit remains overdue (as defined by Bangladesh
Bank) for 6 months or beyond. Hence, all
DF and BL loans were reported as ‘Defaulted Loan’ in the CL 1 reporting format.
