BB relaxes ICRRS guidelines for small firms

Staff Correspondent | Published: 22:40, Jan 06,2021

 
 

The Bangladesh Bank on Wednesday exempted banks from having to comply with the Internal Credit Risk Rating System guidelines in issuing credit to a number of areas.

The central bank issued a circular in th is regard on the day. As per the circular, the banks were exempted from following the ICRRS guidelines in issuing credit to small enterprises in manufacturing with total loan exposures of less than Tk 1 crore.

The exemption would also be applicable for issuing credit to micro finance institutions, merchant banks, stock brokerage houses and non-government organisations, the BB circular said.

For these types of entities, the banks were asked to use banks’ respective credit risk management tools and risk mitigation strategies.

An official of the central bank said that compliance with the ICRRS guidelines sometimes made it difficult for the banks to borrow funds to those entities which were mentioned in the BB’s circular, prompting the central bank to exempt them from complying with the guidelines.

Earlier, the exemptions were only applicable for issuing loans to consumers, small enterprises with total loans exposures of less than Tk 50 lakh, short-term agriculture loans, micro-credit, and lending to bank, micro financial institutions and insurance companies.

More about:

Want stories like this in your inbox?

Sign up to exclusive daily email

Advertisement

 

Advertisement

images