BB seeks large loan info every month

Bangladesh Bank (BB) has instructed banks to submit information on large loans from next month in line with the single borrower and large exposure lending limit fixed two months back.

The information must be submitted to the central bank within 10 days of every month, said the BB in a circular on Wednesday.

The banks need to send both hard and soft copies along with the loan details as per the external credit risk rating systems guidelines and the minutes of board meetings.

In January, BB fixed banks’ single borrower and large exposure lending limit to within 25 per cent of its capital. The policy was issued with a view to strengthening credit risk management of banks by limiting concentrated exposures and further improving the stability of the banking sector.

Earlier, a client or group got a loan facility for both funded and non-funded up to 35 percent of the capital of a bank. Now such clients are getting 25 percent of the capital.

For the large loans, six slaps have been introduced, according to the ratio of the classified loan.

The first slap is if a bank has a classified loan ratio is 3 per cent, the large loan can be given 50 per cent of its total loan and advances. Earlier it was 5 per cent and 56 per cent respectively.

The last slap is if a bank has a classified loan ratio over 20 per cent, the large loan can be given 30 per cent of its total loan.

However, a large loan exposure limit will not exceed 400 per cent of a bank’s total capital.