The Bangladesh Bank on Tuesday eased the credit rating system so that borrowers, who have suffered economic shocks amid the coronavirus outbreak, can have easy access to bank finance to revive their businesses.
To this end, the central bank on the day amended its Internal Credit Risk Rating System, a mandatory rating system for the banks in issuing credit to their customers.
Under the latest BB circular, the banks were allowed to consider the audited finance statements of either 2019 or 2020 in determining the credit risk rating for the year 2021.
The central bank said that the change was made with a view to keeping the impact of the coronavirus outbreak within tolerable levels for the banks’ customers.
The BB also eased the rating system by lowering the aggregated score requirement of each of the four notches of the system that was prepared based on quantitative and qualitative parameters.
Under the amended ICRR system, if the score of a bank borrower is equal to or greater than 75, he or she is rated as excellent. To avail the ‘excellent rating’, achieving a score of equal to or greater than 80 was a must.
To avail the ‘good rating’ under the revised ICRR, achieving a score between 65 and 75 would be a must while the requirement range was set between 70 and 80 earlier to avail the same rating.
To achieve a ‘marginal rating’, a score ranging between 55 and 65 would be a requirement under the amended ICRR system. However, to avail the same rating, the required score range had been set between 60 and 70.
Under the amended ICRR, a rating score below 55 was set as unacceptable while the score was set at 60 before the amendment.
An official of the central bank said that the fundamental strength of many companies had deteriorated following the outbreak of coronavirus, prompting the central bank to relax the rating system.
The central bank circular said that in deriving ICRR, whatever score a borrower gets in the qualitative part, if the score in the quantitative part is less than 45 per cent, the borrower’s ICRR will be unacceptable.
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