On Aug. 17, BNG CB issued rules on loan file statement retention.
BNG CB DFIM circular 08 on collecting, preserving audited financial statement in loan files for loans approval/renewal by financial institutions operating in Bangladesh.
Overview
Per noticed public interest as defined in Section 2(6) of Financial Reporting Act 2015 Audited by Chartered Accountants when accepting/renewing funds from financial firm.
Also for stakeholders re so-called financial statements (e.g. management audit report, without submitting updated financial statements); review reports, etc.
As are hindering financial firms from ensuring loan discipline, defaulting amount is up.
So guidelines to ensure greater loan discipline in financial entities, prevent defaults.
Financial reporting in interest of maintaining discipline in financial institutions, ensuring transparency in loan process law, loans by firm in favor of any public interest body.
I.e. organization as defined in Section 2(6) of Compulsory Audit by Chartered Accountants of 2015 at the time of approval/renewal loans and for stakeholders.
Statutory Audit Report, audited financial report documents must be properly saved.
In addition, in case of approval/renewal of loans by financial institutions, it will also be necessary to receive audited financial statements of body, keep proper documents.
Plus the financial report submitted by the borrower in order to ensure loan discipline in financial institution and in case of loan default at a later stage.
Reported information on verification by financial institution with information provided in DV5 must be consistent with IAB, financial institutions must use D5 form.
Use on their own initiative but also must take necessary steps in liaison with ICAB.
Directive issued under powers of section 16(g) of the Financial Institutions Act 1993.
Effectiveness
The circular entered into force immediately.
Mar. 2022 CMSME Applicability
On Mar. 29, 2022, BNG CB said that the provisions of circular DFIM 08 will be effective for cottage, micro and small sector enterprises (CMSMEs) from Jan. 1, 2023.
Feb. 2023 Amendment
On Feb. 13, 2023, BNG CB decided cottage, micro and small sub-sectors included in CMSME sector will be considered as public interest organizations from Jan. 1, 2025.
Also confirmed that all the instructions in its Aug. 2021 circular remained intact.
